The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4795 level and was capped around the $1.4845 level. Technically, the pair continues to orbit the $1.4815 level, representing the 23.6% retracement of the move from $1.4365 to $1.4950. Traders bought U.S. dollars on news that a rescue plan for troubled U.S. bond insurer Ambac Financial Group may soon be announced that would maintain Ambac’s AAA credit rating that is jeopardized by losses on securities linked to unpaid housing mortgages. Traders await Federal Reserve Chairman Bernanke’s testimony to Congress on Wednesday to see if he offers any clues about how expansionary the Fed’s monetary policy will be. Most traders believe the Fed will reduce interest rates on 18 March and 30 April. Dallas Fed President Fisher – who voted for no change in rates at the Federal Open Market Committee meeting of 29-30 January where rates were lowered by 50bps – on Friday said not much has changed between that meeting and the present, suggesting he may vote against additional monetary expansion. Data released in the U.S. today saw January existing home sales off 0.4% to an annualized 4.89 million units while the average sales price of existing home sales was off 4.6% y/y. Also, home inventories were up 5.5% and these data evidence the ongoing recession in the U.S. housing market. In eurozone news, traders await a speech from European Central Bank President Trichet later in the day. Bundesbank Vice President Zeitler reported Germany’s economic growth will be closely linked to ongoing wage negotiations. ECB member Stark noted wage increases must remain moderate to keep inflation at bay. Stark added We have made it clear that economic developments may result in a possible damping effect on inflation. That doesn't mean that we have changed our objective and now react directly to economic risks. This is what we are measured against, and our credibility depends on it. Stark also noted the ECB is highly dissatisfied with current inflation rates and that the phenomenon may be more stubborn than we believed at the end of 2007. Euro bids are cited around the US$ 1.4490 level.