The euro weakened vis--vis the U.S. dollar today as the single currency tested bids around the US$ 1.5730 level and was capped around the $1.5915 level. The common currency established a new lifetime high before ceding intraday gains. As expected, the European Central Bank kept its main refinancing rate unchanged at 4.00% and ECB President Trichet said policymakers sentiment is the same as (the previous meeting on 6 March). Trichet added rates are high enough to counter inflation pressures despite the fact that consumer inflation is currently around 3.5%. Trichet added the ECB deplores excessive currency volatility and noted with great attention and interest that the U.S. has reaffirmed its commitment to a strong U.S. dollar policy. Data released in the U.S. today saw weekly initial jobless claims fall 53,000 to 357,000 while continuing jobless claims rose 3,000 to 2.94 million, its highest level in more than 3.5 years. Also, the February trade deficit expanded 5.7% to US$ 62.3 billion. Most traders do not expect any momentous breakthroughs on exchange rates at this weekends Group of Seven and IMF/ World Bank meetings. G7 policymakers are expected to approve guidelines by the Financial Stability Forum to strengthen the international financial community. U.S. Treasury Secretary Paulson today reported the U.S. economy has turned down sharply. In eurozone news, Germanys DIW sees Q2 GDP growth at 0.4%. Euro bids are cited around the US$ 1.5345 level.
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