Jean-Claude Trichet seems to have signalled an end to the rate easing cycle of the European Central Bank, causing the Euro currency to strengthen over the past week or two.
Meanwhile, traders of Fed Fund futures are suggesting the possibility that the Fed may slash interest rates this week from the current 1% to just .25%. This would peg the interest rate for the Dollar at the lowest among the G-10, setting up a potential for a Dollar carry trade. This can only hurt the Dollar and stoke fears of renewed inflation.
