3/31/2010

Central banks in Europe and the U.S. are implementing varying strategies to deal with the financial crisis, sending euro and dollar short-term money markets in different directions. While the three-month euro London Interbank Offered Rate fell to a record low, the dollar rate reached a six-month high. "Euro money markets remain flush with cash, and that's likely to remain the case until July," said Don Smith, an economist at Icap. "In the case of dollar money markets, lenders are becoming more cautious in anticipation of tighter policy as the [Federal Reserve] unwinds its various liquidity programs."

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