The euro moved marginally higher vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3375 level and was supported around the US$ 1.3245 level. European and North American names lifted the common currenct to intraday highs before late-day profit-taking ensued. The pair got a lift after it was reported that ADP April private sector jobs were down a less-than-expected 491,000, much lower than forecast and lower than the downwardly revised 708,000 figure for March. The headline U.S. April non-farm payrolls report will be released on Friday and many forecasts are calling for around a 580,000 to 610,000 decline in jobs in addition to the 663,000 loss already announced for March. Federal Reserve Chairman Bernanke yesterday reported he expects the unemployment rate to top out at a 9% handle even after the U.S. economic recovery has started. The big item on traders€™ radar tomorrow is the release of U.S. banks€™ stress tests results. There is widespreads talk that around ten of the nineteen largest banks € including Citigroup, Bank of America, and Wells Fargo € will be asked to raise additional capital to support their financial positions. There is talk that Bank of America may need to raise as much as US$ 34 billion in additional capital. In eurozone news, EMU-16 March retail sales were off 0.6% m/m and 4.2% y/y, their largest yearly decline on record. The European Central Bank is expected to announce that it is reducing its main refinancing rate by 25bps to 1.00% tomorrow. Some dealers believe the ECB may announce quantitative easing measures. Other data released today saw EMU-16 April services PMI improve to 43.8 from 40.9 in March. Also weighing heavily on the common currency today was an announcement that Standard & Poors reduced its ratings for five of six German rated Landesbanks, an event that increased risk aversion. Euro bids are cited around the US$ 1.2765 level.
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