The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3340 level and was supported around the US$ 1.3175 level. Data released in the eurozone overnight saw flash March eurozone consumer price inflation recede to its lowest level ever, declining to 0.6% from 1.2% in February € much lower than expected. EMU-16 inflation remains in a downward trend and this will likely provide the European Central Bank with more scope to reduce interest rates in the near term. It is possible the ECB will reduce its main refinancing rate by 50bps on Thursday from the current 1.50%. Notable, the ECB has already reduced rates by 275bps since October and there is widespread speculation the ECB may adopt a quantitative easing framework that could involve the purchase of sovereign debt in the secondary market. Eurogroup chairman Juncker said the European Union€™s ‚¬200 million fiscal stimulus plan will not have a €œtangible immediate€ impact on the economy and sees a greater impact in 2010. Other eurozone data saw German unemployment rise in March, up 69,000 to around 3.586 million. In U.S. news, St. Louis Federal Reserve President Bullard expressed concen with the rapid growth in the U.S. monetary base. Data released in the U.S. today saw the 20-city January S&P Case-Shiller home price index off 19.0% while the average price of U.S. homes dipped to 2003 levels. Data to be released today include March consumer confidence and March Chicago PMI. Euro bids are cited around the US$ 1.3245 level.
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