3-mth Dollar, Euro, Sterling interbank rates slip

LONDON, April 6 (Reuters) - Interbank lending rates for three-month euro, dollar and sterling funds eased on Monday, as bets that the worst of the financial market crisis may be over suggested banks may be more willing to lend. Japan said it would spend at least $100 billion more to boost its economy, while global equities and commodities extended last week's rebound.

The picture wasn't uniformly rosy, however: two-year U.S. interest rate swaps spreads widened slightly and euro zone banks' overnight deposits at the European Central Bank rose to their highest in a month.

Three-month euro deposit rates were indicated between 1.20 and 1.43 percent versus 1.20-1.46 percent early in London on Friday.

Three-month dollar deposit rates were indicated in a range of between 1.10 and 1.45 percent, compared with 1.20-1.45 percent while three-month sterling funds were quoted in a 1.05-1.40 percent range compared with 1.38-1.48 percent.

Interbank deposit rates are only indicative prices of where banks are lending to each other, which institutions use as a base to set their own lending rates.

Market Commentary

MARKET COMMENTARY ON 06TH APRIL 2009

GBP/USD closed higher on Friday as it extended this week's rally. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, February's high crossing at 1.4990 is the next upside target. Closes below the 20- day moving average crossing at 1.4310 are needed to confirm that a short-term top has been posted.

EUR/USD closed higher on Friday and above the 10-day moving average crossing at 1.3425 tempering the bearish outlook. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, March's high crossing at 1.3700 is the next upside target. Closes below Monday's low crossing at 1.3150 would confirm that a short-term top has been posted.

USD/CHF closed higher on Friday and above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral signaling that sideways trading is possible near-term. If June extends this week's rally, March's high crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/CAD closed higher on Friday and above the 10-day moving average thereby confirming that a short-term low has been posted. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, March's high crossing is the next upside target. Closes below Wednesday's low crossing would confirm that a short-term top has been posted.

USD/JPY closed higher on Friday as it extended this week's rally. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this week's decline, the 75% retracement level of last fall's rally crossing 98.50 is the next downside target. Closes above the 20-day moving average crossing at 101.70 would temper the near-term bearish outlook.