The euro fell sharply vis--vis the U.S. dollar today as the single currency tested bids around the US$ 1.5710 level and was capped around the $1.5955 level. Traders continued to book profits ahead of the weekend following the common currencys move to within fifteen pips of the psychologically-important US$ 1.6000 figure yesterday. Data released in the eurozone today saw the April consumer confidence index recede to -7 from -3 in March while German March PPI was up 0.7% m/m and 4.2% y/y. Overall eurozone consumer prices remain elevated as the EMU-15 CPI rate is around 3.6%, significantly above the ECBs 2.0% ceiling target. An interview published today with European Central Bank arch-hawk Weber quoted him as saying inflation will likely remain at or above 3% for the remainder of the current year and called this a very alarming environment for a stability-oriented central bank. Weber added Should further price risks or second round effects occur, we need to act with determination. In U.S. news, Boston Fed President Rosengren said For those financial institutions that do have access to the Discount Window, there is indeed a need for the Fed to have broader access to information than marketplace counterparty creditors, if we are to effectively manage our responsibilities as lender of last resort and custodian of financial stability. Traders await earnings reports from U.S. banking giant Citigroup following news that Merrill Lynch posted its third consecutive quarterly loss and could slash as many at 4,000 jobs. Philadelphia Fed President Plosser cautioned against expecting more from the Fed than it has the ability to deliver. It was reported that the Philadelphia Feds manufacturing index reached a seven-year low. Euro bids are cited around the US$ 1.5345 level.
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