Asked whether the use of covered bonds for QE favored Germany over other countries as that is where they are most widely issue, Trichet said they were chosen because the asset class was particularly hard hit by the credit crisis.
EUR/USD continues to rise as markets see the steps taken by the ECB as pretty mild relative to the massive intervention by the Fed. 1.3440 is resistance while 1.3450 barriers are eyed. We trade at 1.3430. The market also welcomes a proactive stance by the ECB given its historic reticence on monetary ease.
Dealers note talk of Russian buying in EUR/USD, helping push the pair onto the 1.34 handle. They earlier intervened in USD/RUB.
