The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.2815 level and was supported around the $1.2615 level. Yesterday€™s strong gains in U.S. equity markets coincided with a bid in the common currency and news that Citigroup€™s January and February were profitable. A report from U.S. Treasury Secretary Geithner that he plans to inject capital to help lenders reduce their exposures to distressed securities also impacted the market. Traders remain curious as to whether Citigroup and any other U.S. financial institutions will be nationalized by the Obama administration and whether or not the Fed€™s new asset purchase facilities ease credit strains. Federal Reserve Chairman Bernanke yesterday reiterated that major financial institutions will not be permitted to fail and said a sustainable economic recovery will €œremain out of reach€ until the banking sector is stabilized.€ He added 2010 will be a year of growth if the current measures being taken to support the economy result in the recession ending later this year. In eurozone news, German January factory orders were off 8% m/m and 37.9% y/y while the German January producer price index was off 1.2% m/m and up 2.0% y/y. Euro bids are cited around the US$ 1.2385 level.
Join the Discussion