ECB's Trichet repeats rates could go down in December. Brazilian Globo TV reported that Trichet said in an interview that the ECB will have new projections on growth and inflation in December and that a rate cut cannot be ruled out. He stressed that when the ECB takes the decision to cut rates "it is because the inflationary risks are alleviating". Trichet also said that tensions in money markets are alleviating, even though they still exist. Trichet sees room for fiscal stimulus measures in countries that "behaved properly" in the past with regard to budget consolidation, while he sees limited room in countries with already high deficits. Nothing really new in the comments, but a confirmation that another cut in December is very likely. In addition, Trichet said bank is still focused on price stability, and has decided to cut rates because of a "significant alleviation of inflationary pressures". Trichet stressed that the central bank's primary mandate "has been, is today and will be tomorrow, to deliver price stability in the medium term". Nothing in the comments that changes the interest rate outlook, but rather an affirmation that the central bank is not changing its objective in the wake of the crisis and that rate cuts are in line with the ECB's goal to deliver price stability. Meanwhile, Euro-Dollar's (EURUSD) rally stalled as macro accounts and short term speculative funds continued to establish short positions between 1.2850 and 1.2900. This was a feature of Friday's session after risk appetite was dampened following weak U.S employment data. This interest was evident in Asia, although news of the large Chinese stimulus package has aided risk appetite and put a floor underneath the euro. However, fundamentally the euro is likely to struggle ahead, with Euro-Zone economic data on the slide and ECB rhetoric leaving the door open for another rate cut in December. ECB chief Trichet said rate could go down in December, which should offer scope for euro losses in due course. EUR-USD is expected to move back towards the lower end of the range, between 1.2500 and 1.2550. Only a move above 1.2930 would negate this trend and open up the topside to the 1.3005 resistance.