The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3800 figure and was supported around the $1.3535 level. The U.S. dollar continues to suffer as a result of the ongoing global economic pullback and traders will pay close attention to remarks on additional U.S. economic stimulus possibilities from incoming U.S. President Obama around 1600 GMT today. Data released in the U.S. today saw weekly initial jobless claims fall 24,000 to 467,000 while continuing jobless claims rose to 4.611 million, the highest reading since November 1982. Expectations for tomorrow’s December non-farm payrolls report are grim following the release of a very bad ADP private-sector employment report for December yesterday. Many economists are speculating the U.S. economy may have shed much more than 500,000 jobs last month, a development that could be very negative for U.S. assets and keep the Fed’s focus squarely on expanding monetary policy further. In eurozone news, many poor economic data were released today. Eurozone December economic sentiment fell to its lowest level since at least 1990 and German exports were off 10.6% m/m in November. Also, German November manufacturing orders were off 6% and Spanish unemployment now exceeds three million for the first time in more than twelve years. Additionally, the European Commission’s December business climate index fell to -3.17 from -2.10 in November, the lowest level since records began in 1985. Germany’s Deutsche Bank is privately forecasting the German economy could contract by as much as 4% in 2009 and Goldman Sachs said German unemployment could double to about six million. European Central Bank President was quite bearish in remarks released overnight, saying It's clear that we have had a significant deterioration of the real economy. What strikes me is that the most recent projections are also the most pessimistic. And this is true at a global level, not particularly at the level of Europe. Euro bids are cited around the US$ 1.3055 level.
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