The euro fell sharply vis--vis the U.S. dollar today as the single currency tested bids around the US$ 1.5565 level and was capped around the $1.5785 level. The common currency came off following news of more write-downs at European financial institutions and better-than-expected U.S. economic data. Swiss banking giant UBS announced upwards of US$ 19 billion in write-downs and Germanys Deutsche Bank also announced it will be making sizable provisions to compensate for credit losses. These loss provisions suggest there could be additional problems throughout the European banking sector. European Central Bank Noyer said banks should be assured they can find liquidity in the market or from the central bank to deal with funding shortfalls. Data released in Germany today saw the March jobless total decline about 110,000 to 3.057 million with the jobless rate lower at 8.4%. Also, EMU-15 February unemployment was unchanged at 7.1% and EMU-15 March manufacturing PMI printed at 52.0. It was also reported that German February new machinery, plant orders were up 10% y/y. In U.S. news, the March ISM manufacturing index improved to 48.6 from 48.3 in February while February construction spending improved to -0.3% from -1.0% in January. Traders will pay close attention to testimony from Federal Reserve Chairman Bernanke tomorrow followed by Fridays March non-farm payrolls data. Euro bids are cited around the US$ 1.5345 level.
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