The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4800 figure and was capped around the $1.4915 level. Today’s intraday low was just above the 76.4% retracement of the move from $1.4920 to $1.4360. Many data were released in the U.S. today. First, December personal income was up +0.5% while December personal spending was up +0.2%. Second, weekly initial jobless claims increased 69,000 to 375,000, the highest level since October 2005. These data are important because they evidence a potential deterioration in the U.S. labour market. Tomorrow’s all-important U.S. January non-farm payrolls data are expected to show job growth of about 65,000 workers. Traders will also pay close attention to revisions in November’s and December’s jobs tallies. Third, the Q4 employment cost index was up +0.8% and average hourly earnings data released tomorrow will be scrutinized to see if nagging inflation pressures are having so-called second-round effects. Fourth, the December core personal consumption expenditures index was unchanged at +0.2% m/m and +2.2% y/y with a 3.5% print on the headline number. These data are closely monitored by the Fed and confirm that inflation remains above the Fed’s perceived comfort zone. Fifth, the Chicago Fed’s January business activity index fell to 51.5. Traders are still talking about yesterday’s 50bps monetary easing by the Federal Open Market Committee. Most traders now believe the FOMC will reduce the federal funds target rate by up to another 50bps at the 18 March and 30 April FOMC meetings. Dealers are also paying close attention to a report that ratings agency Standard & Poors is downgrading or putting on notice for potential ratings cuts up to US$ 270 billion in sub-prime mortgage bonds along with US$ 264 billion in collateralized debt obligations. In eurozone news, the EMU-15 consumer confidence survey fell to -12 in February from -9 in January. Also, EMU-15 annualized consumer price inflation was up 3.2%, the highest level since the common currency’s inception and significantly above the ECB’s target ceiling of 2.0%. These data may render it difficult for the ECB to ease monetary policy in Q1. Data released in Germany today saw December retail sales fall 0.1% and were off 2.2% in 2007 as a whole. Also, EMU-13 December unemployment was unchanged at 7.2%. Euro bids are cited around the US$ 1.4685 level.