Daily Report: Dollar Look to Retail Sales for Fuel to Extend Rally

[Forex-Outlook]

Euro makes new 13 month low against dollar overnight but momentum is so far mild. ECB Trichet said in an interview that ECB is not "embarking on quantitative easing". The bank will "withdraw the liquidity that we will inject mainly through tendering term deposits." Also, Trichet emphasized that sterilizing the government bond purchases "does not present technical difficulties," and he reiterated that the "the Governing Council will not tolerate inflation."

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