The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3030 level and was supported around the US$ 1.2930 level. The European Union will this week likely suggest that a credit line be made available for EU members that are not part of the eurozone to provide €œbalance of payments assistance.€ A credit line of ‚¬25 billion was made available in December and EU leaders are concerned that some EU members may not be able to meet their payment obligations unless additional aid is appropriated. German Chancellor Merkel and French President Sarkozy are rallying EU members to get behind the G20 initiative to strengthen the international financial regulatory systems. Group of Twenty officials are convening in London on 2 April and there is a lack of unanimty among attendees as to exactly what needs to be accomplished at the meeting. For starters, U.S. officials are said to be pressing their European counterparts to offer more of a fiscal stimulus to eurozone member countries. European Central Bank member Draghi today reported €œIt's possible that unconventional monetary policy measures may be needed.€ ECB member Mersch added there is €œno evidence of a credit crunch€ in Europe but would not rule out additional monetary easing. Other European data saw Germany€™s March ZEW index improve to -3.5. Germany€™s IWH Institute think tank downwardly revised its economic outlook for 2009 to -4.8% for German GDP growth from the previous forecast of -1.9%. In U.S. news, February producer price inflation was up 0.1% m/m and off 1.3% y/y. Core PPI was up 0.2% m/m and 4.0% y/y. Also, February housing permits were up 3.0% to 547,000 annualized units while February housing starts were up 22.2% TO 583,000 in February, the largest increase since 1990. Euro bids are cited around the US$ 1.2385 level.
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