The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4885 level and was supported around the $1.4780 level. The common currency reached its highest level since 1 February on account of a stronger-than-expected German February Ifo business climate index print of 104.1, up from January’s 103.4 level. Most economists expected a decline in the index and traders lifted the euro on the idea that these data will decrease the likelihood European Central Bank will lower interest rates anytime soon. These data overshadowed other data that saw German Q4 GDP growth fall to +0.3% on account of lower consumption. Also, the Ifo expectations index weakened to 98.2 from 99.0. European Central Bank member Orphanides indicated the ECB may downwardly revise growth and inflation projections but noted there are already some second-round inflation effects in the eurozone. ECB President Trichet spoke last night and will present the ECB’s most recent economic projections on 6 March. In U.S. news, January headline producer price inflation was up 1.0% m/m and 7.4% y/y with the core rate up 0.4% m/m and 2.3% y/y. Some of these data points were the hottest they’ve been in more than a decade and they render it more difficult for the Federal Reserve to lower interest rates. The Federal Open Market Committee’s next interest rate decisions will be released on 18 March and 30 April. Other data released today saw February consumer confidence fall to 75.0 from 98.3 in January. Also, Standard & Poors reported U.S. house prices lost 8.9% in Q4 2007. Additionally, the Richmond Fed’s February manufacturing index improved to -5 from -8 in January. Traders await remarks from Fed Vice Chairman Kohn later in the North American session followed by testimony from Fed Chairman Bernanke tomorrow. Euro bids are cited around the US$ 1.4490 level.