During early deals on Friday, the euro fell to new multi-day lows against the yen and the dollar following various lackluster economic reports from Europe. Against the currencies of Switzerland and UK, the euro fell from 3-day and 4-day high, respectively.

Euro-zone's industrial new orders dropped 3.4% month-on-month in January, after falling a revised 8% in December. Economists were looking a decline of 5.6%. Year-on-year, industrial new orders plunged 34.1% in January, compared to the 23.8% decline in the previous month. Economists had predicted a decline of 28.4%.

Italian retailers' confidence indicator declined to 91.7 in March from 94.6 in February, economic think tank ISAE said today. The survey found pessimism was widespread with regard to the current economic conditions.

French statistical office INSEE said gross domestic product or GDP contracted less than previously estimated in the fourth quarter of 2008. Final data showed that GDP fell 1.1% quarter-on-quarter in the last three months of the previous year, compared with a 1.2% decline estimated previously. In the third quarter, the economy expanded only 0.1%.

Germany's import price index dropped 5.4% year-over-year in January, after falling a revised 4.1% in December. This was the steepest decline since February 1999. Economists were looking a decline of 6% for January. On a monthly basis, import prices dropped 0.5% in January, following a 3.6% fall in December. Economists had predicted a decrease of 0.4%.

The European stocks nudged higher today, taking positive cues from Asian markets.The pan-European Dow Jones Stoxx 600 edged up 0.1% to 179.22, and for the week is up 3.9% -compared to an over 8% push higher for the S&P 500.

Euro is under pressure as the German finance minister Peer Steinbrueck said the euro was at risk if the EU's Stability and Growth Pact isn't taken seriously. He complained that Germany's massive interest in EU's stability and Growth pact is not taken seriously by some. If it is not taken seriously, I am telling you, the euro will have trouble one day in terms of its own credibility and stability, he said.

The European currency paused from a recent uptrend versus UK's sterling, falling to 0.9356 after hitting a nearly 4-day high of 0.9420 at about 5:20 am ET Friday. The euro-pound pair closed Thursday's deals at 0.9361.

The economic report released at 5:30 am ET, which said that the UK GDP contracted more than initially estimated did not show much impact on the euro-pound pair.

The UK economy contracted 1.6% sequentially in the fourth quarter, revised down from a decline of 1.5%, a report from the Office for National Statistics showed Friday. The economy entered its first recession since 1991.

Year-on-year, GDP was down 2% in the fourth quarter. According to the initial estimate, the British economy had fallen 1.9%. For the whole year 2008, GDP rose 0.7%, unrevised from the previous estimate.

Meanwhile a separate report said that UK's current account deficit narrowed to GBP 7.6 billion in the fourth quarter of 2008 from a revised deficit of GBP 8.2 billion in the previous quarter, the Office for National Statistics said Friday. Economists had expected deficit to contract to GBP 5.9 billion, while the third quarter shortfall was revised from a GBP 7.7 billion deficit.

The euro dropped to a 9-day low of 1.3369 against the dollar and a 2-day low of 130.98 versus the yen by about 6:15 am ET Friday, compared to Thursday's closing values of 1.3528 and 133.55, respectively. The European currency may likely find support near the 1.298 level against the dollar and 129.06 level against the Japanese unit, if it slides further.

Focusing on economic reports from Japan, the consumer prices in Japan posted little or no change for the year to February. The reported said that its core consumer price index was unchanged in February from one year earlier, while the overall CPI was down 0.1 percent on year.

The data showed overall inflation was down 0.3 percent compared to one month earlier.

Another report said that retail sales in Japan plummeted by 5.8 percent in February when compared to a year earlier. The decline was the sharpest in 7 years and the 5th straight month of lower retail sales.

In the New York session today, the US personal consumption expenditure report is due out at 8:30 am Eastern Time. Analysts expect the headline figure to rise modestly to 0.8 percent from 0.7 percent increase in January.

Additionally, the final reading of the University of Michigan's consumer sentiment index for March is due to be released at 10 am ET. The report is expected to show that the consumer sentiment index rose to 56.8 from February's 56.6.

Against the Swiss franc, the common currency of Europe advanced during the early session, climbing to a 3-day high of 1.5304 by about 3:30 am ET. Thereafter, the euro-franc pair reversed ITS direction and is now worth 1.5267. At yesterday's North American session close, the pair was quoted at 1.5248.

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