The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.2820 level and was supported around the $1.2580 level. U.S. equity markets jumped higher early in the North American session and the U.S. dollar declined. European Central Bank member Hurley reported the central bank €œwill continue to monitor closely all developments€ and added €œthe uncertainty concerning the outlook remains very high.€ Hurley also noted €œI should mention that the ECB is currently studying possible nonstandard monetary policy measures. Quantitative easing is a legitimate (monetary policy) measure.€ Most traders believe the ECB will conduct quantitative easing measures in H1 2009 but acknowledge the difficulties in trying to select assets to purchase with varying credit profiles. European Central Bank member Bini Smaghi noted €œIf the (economic) situation worsens, the ECB is ready to reduce rates further, even to zero€¦That is above all the case if the economy was really threatened by sustained deflation. And in such a situation, the best approach would be to act sooner rather than later.€ U.K. Chancellor of the Exchequer Darling was critical of the European Union today, saying the European Union and European Central Bank should do more to aid struggling Central and Eastern European developing countries that are struggling with the several regional crisis. Data released in the eurozone today saw the French January trade balance widen to -‚¬4.55 billion while the German February consumer price index rose 0.6% m/m and +1.0% y/y. In U.S. news, Federal Reserve Chairman Bernanke called for regulatory reform, noting €œWe must have a strategy that regulates the financial system as a whole, in a holistic way, not just its individual components.€ Data released in the U.S. today saw January wholesale inventories off 0.7% m/m, up from the revised December fall of 1.5%. Euro bids are cited around the US$ 1.2385 level.
Join the Discussion