The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5885 level and was supported around the $1.5775 level. The common currency reached its highest level since 24 April as traders positioned themselves ahead of tomorrow’s interest rate decision and press conference from the European Central Bank. Most traders expect the ECB will lift its main refinancing rate target by 25bps to 4.25% and the real question involves what exactly ECB President Trichet will say after the decision is announced. ECB policymakers have recently intimated tomorrow’s likely hike will probably be a one-off tightening but recent inflation data in the eurozone has only gotten hotter and changes are increasing that the ECB will have to move again before the end of the year. Data released in the eurozone today saw EMU-15 producer price inflation at an eighteen-year high in May, up 1.2% m/m and 7.1% y/y. Other data saw May new machinery, plant orders off 12% y/y. In U.S. news, the dollar also suffered after ADP reported June private payrolls fell 79,000, much worse than expected. This print has resulted in some revisions to tomorrow’s June non-farm payroll forecast that had many economists forecasting a loss of about 50,000 jobs last month. Other data saw May factory orders climb 0.6%, down from +1.3% in April, with the ex-transportation component slowing to +0.4%. Atlanta Fed President Lockhart reported he expects Q2 GDP growth to be substantially above Q1’s pace of 1.0%. Euro bids are cited around the $1.5645/ $1.5230 levels.