The euro fell vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.4615 level and was capped around the $1.4730 level. Technically, todayâ€™s intraday high was right around the 38.2% retracement of the move from $1.4365 to $1.4950. Data released in the U.S. today saw January housing starts improve to +0.8% from Decemberâ€™s -14.8% print while January building permits improved to -3.0% from -7.1% in December. Also, the January consumer price index was released and the headline print was up +0.4% m/m and +4.3% y/y with the core reading up 2.5% y/y. These data are above the Fedâ€™s perceived upper limit comfort zone of 2.0%. Elevated inflation readings remain a problem for a proactive, expansionary Fed that is trying to stimulate the economy to counter the housing market recession and reduced final private demand. Data released last night saw the January NAHB homebuildersâ€™ confidence index improve to +20. In eurozone news, traders continue to focus on problems being faced by regional German banks that have significant U.S. sub-prime market exposure. Germanyâ€™s state-owned Landesbanks are in trouble and German finance minister Steinbrueck today called for some industry consolidation. Data released in Germany today saw January producer price inflation up 0.8% m/m and 3.3% y/y. Euro bids are cited around the US$ 1.4490 level.
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