The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2545 level and was capped around the $1.2635 level. The common currency was pressured lower after it was reported the European Union rejected a specific Eastern European plan to stimulate economic growth in the troubled central and Eastern European regions. Instead, EU leaders endorsed a plan to coordinate steps to ease credit strains across the entire bloc. The Eastern European plan called for €190 billion in aid to benefit the region. Traders are also talking about additional stories including Berkshire Hathaway’s worst investment year ever, HSBC’s weaker-than-expected capital position, and the possibility AIG will obtain US$ 30 billion in additional government aid. Dealers are already looking ahead to Friday’s February non-farm payrolls number with most economists forecasting another bad print. In U.S. news, January construction spending was off 3.3% m/m while the February ISM manufacturing survey improved slightly to 35.8. Also, January personal consumption was up 0.6% m/m, up from December’s 1.0% decline, while personal income was up 0.4%, up from December’s 0.2% decline. Notably, the personal savings rate printed at 5.0%, the highest level since March 1995. Additionally, the personal consumption expenditures price index was up 0.2% in January from a 0.5% decline in December. The core PCE price index was up 0.1% m/m and 1.6% y/y in January from a 0.1% decline in December. In eurozone news, the EMU-16 February manufacturing PMI survey declined to 33.5. Also, EMU-16 annualized inflation rose to 1.2% in February from 1.1% in January, ending six months of declines. Euro bids are cited around the US$ 1.2475 level.
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