I reckon the DX should comprise of the G20 currencies, rather than just be an 'interest rate expecatation risk of euroland inverse index'.

I dunno what Trichet is thinking with mediteraneaan unemployment well into double digits (20%+ in many places) talking the euro up like that.

If euroland is having debt problems, then a weak euro helps out. A high euro increases unemployment (already happening) and imports inflation as well. The time to talk the euro up is when it drops below parity, not now. There's no point defending earned cash value of euros if you don't have any because you don't have a job!

The US on the other hand are happy to adopt a weak dollar stance, even whilst pretending they favour a firm dollar. It has been many months since some serious central bank intervention has taken place to prop up the dollar.

Weakening the dollar has the same effect as strengthening the Yuan after all, not to mention reducing the deficit, as the national debt gets paid off with cheaper currency.