The euro depreciated vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.3460 level and was capped around the US$ 1.3650 level. Data released in the U.S. today saw April headline consumer price inflation unchanged m/m and off 0.7% y/y while the ex-food and energy component was up 0.3% m/m and 1.9% y/y. The slide in year-over-year CPI was the largest decline in 54 years. Also, April headline retail sales were off 0.4% m/m and off 10.1% y/y while the ex-autos component was off 0.5% m/m and 7.7% y/y. Other data saw March business inventories off 1.0% m/m and 4.8% y/y while March business sales were off 1.6% m/m and 15.6% y/y. Additionally, mid-May University of Michigan consumer sentiment improved to 67.9 from 65.1 in April. Moreover, it was reported that April industrial production was off 0.5% m/m while capacity utilization shrank to 69.1%. In eurozone news, European Central Bank member Provopoulos pessimistically reported €œ€¦the exit from this most unfavorable international economic situation will be neither easy nor quick€¦Still substantial effort will be necessary given that the interest rate cuts have not been fully translated into lower borrowing rates for households and businesses.€ The ECB reported it is not currently prepared to accept government bonds from central and eastern European governments as collateral for refinancing operations. Data released in the eurozone saw EMU-16 April consumer price inflation rise 0.4% m/m and 0.6% y/y while German Q1 GDP was off 3.8% q/q. Moreover, EMU-16 GDP was off 2.5% q/q and 4.6% y/y. Euro bids are cited around the US$ 1.2765 level.
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