The euro came off vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125 level and was capped around the US$ 1.3335 level. Traders continued to sell the common currency ahead of the long Easter holiday weekend. European Central Bank member Provopoulos reported €œIt will take time for these unprecedented fiscal and monetary interventions to have a positive effect.€ Regarding the possibility the ECB will undertake €œunconventional€ policy options, he added €œThe ECB's interventions with respect to the non-conventional measures are decided each time after careful evaluation under prevailing circumstances. The assessment of the type and scale of such interventions is based on the basic criterion of whether the benefits will reach the end-user, in other words households and businesses. ECB President Trichet reported €œone can imagine further interest rate cuts.€ Data released today saw German industrial production off 2.9% in February and off 20.6% y/y. Also, German final March consumer price inflation was off 0.1% m/m and up 0.5% y/y. The ECB€™s monthly bulletin reported €œThere may be stronger than anticipated positive effects due to the decrease in commodity prices and to policy measures taken. There are concerns that the turmoil in financial markets could have a stronger impact on the real economy, as well as that protectionist pressures could intensify and that there could be adverse developments in the world economy stemming from a disorderly correction of global imbalances.€ In U.S. news, weekly initial jobless claims were off 20,000 to 654,000 while continuing jobless claims weer up 95,000 to 5.84 million. It was also reported that February import prices were up 0.5% m/m and off 14.9% y/y, the largest annualized decline since 1982. Additionally, the February trade gap fell more than expected, printing at €US$ 25.97 billion from January€™s print of €US$ 36.20 billion. Traders are expressing some optimism with the current round of corporate Q1 earnings including Wells Fargo€™s US$ 3 billion profit in Q1. Euro bids are cited around the US$ 1.3100 figure.
Join the Discussion