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Ted spread drops to monthly low

The strain on the interbank lending market eased further today as the Ted spread reached its lowest rate for almost a month and Libor continued to fall.

The Ted spread, which tracks the difference between three-month Libor and US Treasury bills, dropped to 2.6% at 1200 BST today from 2.97% yesterday. Used as a measure of perceived counterparty risk, the Ted is now at its lowest level since September 23 when it stood at 2.5%.

In the overnight markets, US dollar borrowing costs moved to 1.27% from 1.51% yesterday, euro rates dropped to 3.55% from 3

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