The euro depreciated modestly vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4905 level and was capped around the $1.4965 level. The common currency retraced recent gains before launcing an assault on the psychologically-important US$ 1.5000 figure but many traders believe it is only a matter of time before the pair absorbs this level. Notably, European Central Bank and monetary officials last week were trying to steer the euro lower with verbal intervention, clearly concerned the common currency is subsidizing too much of the dollar's downward correction. Data released in the eurozone today saw September consumer price inflation remain unchanged m/m and off 0.3% y/y. This represented the fourth consecutive annual decline and suggests the ECB has enough room to maintain its accommodative monetary policy. Core inflation was up 0.2% m/m and the annual rate fell to +1.2% from +1.3% in August. The common currency failed to gain much traction after Reserve Bank of Australia Governor Glenn Stevens hawkishly reported additional interest rate hikes are on the way. Stevens reported If we were prepared to cut rates rapidly, to a very low level, in response to a threat but then were too timid to lessen that stimulus in a timely way when the threat had passed, we would have a bias in our monetary-policy framework. Reserve Bank of Australia this month became the first major Group of Twenty central bank to begin to withdraw monetary stimulus when it hiked its key rate by 25bps to 3.25%. The U.S. dollar weakened as a result of RBA's decision. The ECB is not expected to raise interest rates before Q1 2010 at the earliest. The ECB today said its current policy remains appropriate in its monthly bulletin and added the euro-area economy is stabilizing and is expected to recover at a gradual pace. ECB policymaker Sramko today reported he expects Q3 eurozone GDP growth of 0.1% q/q and the ECB is now forecasting inflation will turn positive in the coming months. In U.S. news, minutes from the September Federal Open Market Committee meeting were released yesterday in which some policymakers expressed doubts about the sustainability of the U.S. economic recovery and suggested an increase in expanding purchases of mortgage-backed securities to aid the housing market. Other Fed officials noted economic slack should dissipate at a faster pace. Fed officials made it clear they remain very concerned with further sizable credit losses and the impact on the U.S. housing market if the Fed reduces its purchase of mortgage-related debt in the credit markets. Generally, the markets characterized the Fed's minutes as being quite dovish. Data to be released in the U.S. today include September consumer price inflation, the October Empire manufacturing index, weekly initial and continuing jobless claims, and the Philadelphia Fed index. Euro bids are cited around the US$ 1.4445 level.