EUR/USD Fundamental Outlook at 1500 GMT (EST + 0500)

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3090 level and was capped around the US$ 1.3250 level. The common currency came off as traders moved out of higher-yielding currencies and into safe haven plays on account of a swine influenza outbreak that has already claimed more than 100 lives in Mexico. Cases have been reported in the U.S., Canada, Europe, and the Antipodes and there is a growing concern the situation could evolve into a global pandemic. Data released in the eurozone tosay saw the German May GfK consumer sentiment index remain steady at 2.5. Also, the German March import price index was off 0.4% m/m while the eurozone composite index of leading indicators climbed 0.2% to 92.4 in March. Group of Seven officials convened in Washington, D.C. this weekend and German Bundesbank President Weber reported he does not expect the German or eurozone economies to evidence economic growth before the middle of 2010. European Central Bank member Noyer said French banks have passed stress tests so far and ECB member Draghi reported deflation remains a risk to the global economy. Eurogroup chairman Juncker said G7 officials are generally comfortable with current exchange rates as the broadly reflect economic fundamentals. ECB President Trichet said the amount of taxpayers€™ funds that have been but at risk in the U.S. and eurozone in creating fiscal stimuli are roughly similar, countering a reported U.S. claim the eurozone is not doing enough fiscally to help improve its economy. In U.S. news, traders are awaiting next Monday€™s results of banks€™ stress tests to see which of the nineteen largest U.S. banks may require additional capital from the government. Euro bids are cited around the US$ 1.2765 level.