Euro and Pound Moving Higher - Here's a Piece of the Puzzle

We witnessed a large rally in the euro and pound today, much of which was derived from Trichet's comments earlier in the day that the ECB has acted accordingly to help pad the economy during the crisis. Really, Trichet's comments made traders realize that the ECB is hawkish (as usual) and would move slower to lower rates. While Trichet mentioned that the ECB would cut rates, if the situation warranted, the overall theme is that the euro will likely retain some carry trade effect and the range-locked paradigm is still solidly in place.