The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2600 figure and was capped around the $1.2805 level. The common currency slid sharply on escalating concerns about western European banks’ exposure to problems at their Eastern European subsidiaries. There is market chatter about a pending implosion in the Eastern European banking industry following a bearish report from Moody’s Investor Service. Data released in the eurozone overnight saw the December EMU-15 trade balance print at -€700 million and for 2008 as a whole the eurozone recorded a record trade deficit of €32.1 billion. Other data saw the February ZEW economic sentiment index improve to -5.8. In U.S. news, President Obama will sign the US$ 787 billion economic stimulus bill in Denver today amid widespread criticism the emergency spending bill will do much to stimulate employment and the economy in the near-term. Data released in the U.S. today saw the February New York State Empire index worsen considerably to -34.65 from -22.2 in January while December net long-term TICS capital flows grew to US$ 34.8 billion. St. Louis Federal Reserve President Bullard speaks later in the day and trades will scrutinize his remarks to see if he talks about the Fed’s latest asset purchases. Euro bids are cited around the US$ 1.2475 level.
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