We have to prepare for exceptional situations, ECB chief Trichet says. I would not exclude anything or precommit to anything ex-ante, he says.

The market expects the ECB to cut rates to record lows of 1.5% at the March ECB meeting. Trichet seems to be setting the stage for a rate cut and a more aggressive move toward quantitative ease without moving rates toward zero like the Fed and BOJ.

EUR/USD trades in the upper end of relatively narrow ranges. It is now at 1.2790.