The euro weakened vis--vis the U.S. dollar today as the single currency tested bids around the US$ 1.5780 level and was capped around the $1.5875 level. The common currency moved to intraday lows early in the North American session following the release of a mixed bag of U.S. economic data. First, it was reported that the New York Federal Reserve Banks Empire State manufacturing index rose to 0.63 in April from a record low of -22.23 in March, above expectations. Second, the March headline producer price index increased to 1.1% m/m while core PPI was up 0.2% m/m and 2.7% over the previous twelve months the fastest pace since July 2005. Third, February net foreign acquisition of long-maturity U.S. securities totaled US$ 60.1 billion, up from US$ 42.2 billion in January while monthly net TIC flows a broad measure of net foreign capital inflows registered US$ 64.1 billion. In eurozone news, the German April ZEW business confidence survey fell to -40.7 from -32.0 in March. European Central Bank member Garganas hawkishly reported Restraining inflation remains the main goal of the ECB. The current direction of ECB monetary policy will be focused on inflation, with the goal of restraining inflation over the medium term. Garganass comments were seconded by Ordonez who noted We are always more concerned with inflation, and our number one objective is inflation. However, if things change we can change. ECB President Trichet reported inflation is certainly a problem, as said by the G7 as well as IMF. Frances finance ministry reported inflation is likely to stabilitze and even decline before the year-end. Euro bids are cited around the US$ 1.5345 level.
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