The euro gained significant ground-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3985 level and was supported around the $1.3805 level. Several factors contributed to the dollar€™s demise today. First, May headline consumer price inflation was up 0.1% m/m and off 1.3% y/y with the ex-food and energy component up +0.1% m/m and +0.8% y/y. The headline year-over-year decline was the sharpest in some 60 years. Second, it was reported the Federal Reserve may try to manage interest rate expectations with a more direct message when Federal Open Market Committee policymakers convene next week. Fed officials are undoubtedly uncomfortable with the recent rise in interest rates across the Treasury curve and may try to craft the message that expectations of a rate hike to withdraw some monetary stimuli are premature. Some economists believe the Fed may even adopt a similar tactic that Bank of Canada recently employed in suggested rates are unlikely to move higher before late 2010. Third, other data released in the U.S. today saw the current account deficit decline to €US$ 101.5 billion in the January € March quarter, down from €US$ 154.9 billion in Q4 2008, but still above economists€™ expectations. In eurozone news, European Union finance officials will convene tomorrow and Friday to discuss stronger supervision of European financial markets. Data released in the eurozone today saw the April EMU-16 global trade balance print at ‚¬2.7 billion, up from March€™s surplus of ‚¬1.8 billion. Euro bids are cited around the US$ 1.3435 level.