The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5830 level and was supported around the $1.5715 level. Technically, today’s intraday low was just below the 23.6% retracement of the move from $1.5140 to $1.5905. Traders paid close attention to earnings results from U.S. investment banking giants Goldman Sachs and Lehman Brothers. The former’s earnings were stronger-than-expected while the latter’s profits fell 57%. Dealers are very concerned that another major financial institution could falter in the wake of Bear Stearn’s monumental collapse over the past week. The Federal Open Market Committee meets today and is expected to reduce the federal funds target rate by up to 100bps. A move of that caliber would essentially push real U.S. interest rates into negative territory when adjusted for inflation. The Fed has recently unveiled many creative lending and credit facilities to try and improve the liquidity transmission mechanisms for commercial banks, investment banks, and primary dealers but it remains to be seen if the Fed can contain the massive problems inherent in the banking and financial systems, or if more credit market dislocations will evolve. Data released in the U.S. today saw February housing starts fall 0.6% to an annualized 1.065 million rate while February building permits fell 7.8% to an annualized rate of 978,000. Also, February producer prices were up 0.3% m/m on the headline level and 0.5% m/m on the core level. On an annualized basis, headline PPI was up 6.4% with core PPI up 2.4% y/y. In eurozone news, Germany’s RWI institute reaffirmed its 2008 GDP growth estimate of 1.7%. Euro bids are cited around the US$ 1.5610 level.