The euro depreciated vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.5320 level and was capped around the $1.5460 level. The common currency failed to hold many of the gains it earned in the North American session following the release of weaker-than-expected U.S. February non-farm payrolls data. It was reported the U.S. economy lost 63,000 jobs last month with the unemployment rate at 4.8% and average hourly earnings up +0.3%. There were also downward revisions of -41,000 and -5,000 to Decemberâ€™s and Januaryâ€™s jobs tallies, respectively. Just prior to the release of these data, the Federal Reserve announced it was increasing the amounts outstanding in its Term Auction Facility to US$ 100 billion to offer additional liquidity to the market. The Fed also announced it would initiate a series of repurchase agreements aggregating US$ 100 billion as 28-day repos. The Fed also noted it is in close consultation with foreign central bank counterparts concerning liquidity conditions in markets and this has some dealers wondering if global monetary authorities may be orchestrating foreign exchange intervention. There had been extensive rumours overnight that the Fed would announce another intermeeting rate cut but they have not yet materialized. Most traders believe the Federal Open Market Committee will ease monetary policy further on 18 March and/ or 30 April. San Francisco Fed President Yellen said the U.S. economic slowdown will decrease inflationary pressures. Dallas Fed President Fisher warned (The Fed) reacted with very deliberate actions which took place over a very short period of time, and I think that shouldn't lead markets to expectations that we will continue to react in that manner. I would discourage you from thinking that simply because of significant action in credit markets like we had yesterday, that suddenly we are going to have a meeting of the open market committee and that suddenly we are going to move Fed funds rates in response. In eurozone news, German January industrial output was up 1.8% m/m and 6.9% y/y. European Central Bank member Weber hawkishly said the prospect of weaker EMU-15 economic growth is not enough reason to anticipate weaker inflation pressures. Euro bids are cited around the US$ 1.5145 level.
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