The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4240 level and was supported around the US$ 1.4070 level. As expected, the European Central Bank kept its main refinancing target rate unchanged at 1.0%. ECB President Trichet warned €œimbalanced public finances€ may detract from confidence and weaken the economic recovery, a stark contrast to French finance minister Lagarde who earlier this week proposed a loosening of the Maastrict treaty criteria that governs stability. Trichet also reported the ECB will maintain the existing size of its covered bond purchase program. This led to a rally in the common currency on the notion the ECB will not be broadening the scope of its quantitative easing framework. Trichet also suggested the global economy will begin a recovery in 2010. The ECB sees EMU-16 gross domestic product off an annualized 5.1% in 2009, worse than the previous 4.1% estimate. Data released in the eurozone saw EMU-16 retail sales up 0.2% m/m and off 2.3% y/y. In U.S. news, Q1 non-farm productivity printed at a revised 1.8% q/q and 2.0% y/y while unit labour costs were up 2.7% q/q and 2.7% y/y and hourly compensation expanded. Collectively, these data helped further the view that the worst part of the economic pullback may have passed yet some economists suggest this may portend a jobless recovery, especially if productivity is increasing with fewer workers. It was also reported that weekly initial jobless claims moved lower for the third consecutive week, off 4,000 to 621,000, while continuing jobless claims were off 15,000 to 6.735 million. Euro bids are cited around the US$ 1.3435 level.