The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4810 level and was capped around the $1.4915 level. Data released in the U.S. today saw Q3 non-farm productivity increase to 9.5% from the revised prior reading of 6.9% while Q3 unit labour costs were off 5.2%, up from a revised -6.1%. Also, weekly initial jobless claims continued to move lower, printing at +512,000, down from a revised 532,000 with continuing jobless claims lower at 5.749 million. Additionally, ICSC chain store sales were up 2.1% y/y. Collectively, these data suggest the U.S. economy remains on the mend though the productivity data can be viewed as a double-edged sword, especially as companies have become more producitve with fewer employees. The Federal Open Market Committee's interest rate decision was released yesterday in which officials noted the economic recovery continues and pared back some of their emergency stimulus programs. The Fed continues to make it abundantly clear that rates are likely to remain unchanged for some time. Many economists expect October non-farm payrolls will have fallen about 175,000 with the unemployment rate around 9.9%. Those data will be released tomorrow in the U.S. In eurozone news, As expected, the European Central Bank kept official interest rates unchanged today with the main refinancing rate unchanged at 1%. ECB President Trichet reported banks have a lot of liquidity already and noted the ECB's December offer of unlimited twelve-month loans will likely be its last - the latest indication the ECB is unwinding some monetary stimuli. Nonetheless, Trichet said the ECB's exit from its emergency stimuli will be timely and gradual and reiterated the central bank will solidly anchor inflation expectations, which is absolutely key in our own strategy. Data released in the eurozone today saw EMU-16 retail sales decline 0.7% m/m and 3.6% y/y, the third consecutive monthly decline. Euro bids are cited around the US$ 1.4445 level.
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