USDX 3-month LIBOR continues to deteriorate; todays fixing drops to 0.418% vs. 0.52% 2 weeks ago, while EUR-3 month LIBOR rises to 0.832% from 0.75 in mid July. This is leading to an ever widening spread in favour of the EUR reaching +41 bps. This weeks article on EURIBOR, Euro & USD Index featured the chart of the EUR-USD libor spreads http://bit.ly/b5Ek8n and its rising correlation with EURUSD. Any hints from JC Trichet today about normalizing monetary policy will likely further boost EURUSD towards the $1.3270 resistance. USDCAD eyes support at 1.01 after the sharp decline from 1.02, which was in line with yesterday's IMT warning here http://chart.ly/ mec6b8 GBPUSD looking to regain $1.5940s. Watch out from Jobless Claims and Trichet conference at 12:30 GMT (13:30 BST).
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