FXstreet.com (Barcelona) - The euro depreciated vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.2605 level and was capped around the $1.2750 level. GCI Financial Team said: Traders are closely monitoring U.S. equity markets after it was announced Citigroup preferred equities would be converted into common equity and the U.S. government would take up to a 36% stake in the troubled banking giant in exchange for its bailout investment.
In eurozone news, German consumer price inflation was up a stronger-than-expected 0.6% m/m and 1.0% y/y in January but economists do not believe this is the end of the strong disinflationary pressure in the eurozone's largest economy. The EMU-16 unemployment rate climbed to 8.2% in January from 8.1% in December, the fifth consecutive monthly increase, while Germany's jobless rate ticked higher to 7.3%. The higher unemployment and lower inflation data render it increasingly likely the European Central Bank will reduce its main refinancing rate by at least 50bps next Thursday.
Euro bids are cited around the US$ 1.2475 level.