Archived IMT (2010.12.10)

CHINA's INCREASE of RESERVE REQMT RATIO is no longer weighing on market sentiment as participants are expecting the more aggressive option of higher interest rates (borrowing and lending). I noted in last night's IMT that a hike in the RRR would be more market friendly than a hike in interest rates. CAD IS STRONGEST CURENCY OF THE DAY so far after Canada trade deficit dropped to C$-1.71 from C$-2.49 bln. EURCAD eyes 1.3280. $EURUSD pressured by improved USD following the $7bln decline in US trade deficit. $1.3160, followed by $1.31.