To see Jean-Claude Trichet do his monthly tapdance in living color, click here.
Rather than boldly deal with the mounting problems weighing on the eurozone, Trichet and Co kicked the can down the road with a timid 50 bp cut. They’ll talk about how aggressive they’ve been and how rates have never been lower.
EUR/USD is experiencing a modest relief rally as the ECB shied away from a more aggressive move.
Small offers are seen at 1.2585/95 with somewhat larger offers now at 1.2620. The BIS has been a steady buyer again today, perhaps working for their friends in Frankfurt. ECB forex reserves have been dropping in recent weeks, leading some to suspect a bit of subtle support from Trichet and Co.
