The euro came off vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.4605 level and was capped around the $1.4695 level. Technically, todayâ€™s intraday high and low were right around the 38.2% and 50.0% retracements of the move from $1.4310 to $1.4920. Data released in the U.S. today saw preliminary January University of Michigan consumer sentiment improve to 80.5 from 75.5 in December while December leading economic indicators fell 0.2%, its third consecutive monthly decline. Richmond Fed President Lacker spoke today and said the FOMC must be attentive to overall inflation and not just core inflation â€“ the latest indication that a sea change in the way the Fed views inflation is incipient. The Bush administration today proposed a US$ 145 billion fiscal stimulus package and most traders believe the FOMC will reduce the federal funds target rate by at least 50bps on 30 January. In eurozone news, European Union finance ministers will convene next week to discuss economic challenges before G7 finance ministers meet in Tokyo on 9 January. The European Commission currently sees the EMU-15 economy growing about 2.2% this year. U.K., German, French, and Italian finance ministers convened in Paris last night and intimated their economies are expected to cool in 2008. The ECBâ€™s January bank lending survey today reported the sharp (Q4 credit) tightening reflects the deterioration of financial market conditions since the start of the financial turmoil last summer and a worsening of banks' situation. Euro bids are cited around the US$ 1.4540 level.
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