The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3735 level and was supported around the US$ 1.3485 level. Traders are talking about U.S. Treasury Secretary Geithner€™s plan announced today wherein the Treasury, Federal Reserve, and Federal Deposit Insurance Corporation will work with private investors in a €œpublic-private partnership€ to purchase troubled assets. The government will allocate US$ 100 billion in funds from the Troubled Asset Relief Program (TARP) and additional private investment to generate at least US$ 500 billion in purchasing power to purchase €œlegacy assets.€ This program could expand to US$ 1 trillion and most of these details were already priced in the market. The government is expected to assume most of the risk with regard to this new plan and it remains to be seen how popular the new plan is in reducing systemic risk in the market. Data released in the U.S. today saw February existing home sales rise 5.1% to 4.72 million annualized units while existing home sales fell 15.5% to US$ 165,400. Also, the Chicago Fed€™s national activity index printed at -3.48 for the three-month period ending in February, up from -3.61 in the three months ending in January. In eurozone news, the German government will revise its economic forecasts on 29 April and it is likely the current forecast of a 2.25% contraction for 2009 will be downwardly revised. Data released in the eurozone saw the EMU-16 January trade deficit widen to -‚¬10.5 billion. European Central Bank member Weber reiterated the central bank has €œroom to maneuver€ and said €œunconventional€ policy measures remain under discussion. Euro bids are cited around the US$ 1.2385 level.
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