The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4365 level and was capped around the $1.4510 level. The common currency was pressured overnight on rumours that German Chancellor Merkel may resign following a media report that she was losing the support of her coalition partners. Merkel dismissed this talk as absurd and pledged to move forward with her pledge to reduce taxes. Data released in the eurozone saw the November trade surplus print at €4.8 billion, down from €6.6 billion in October, while EMU-16 consumer price inflation rose 0.3% m/m and 0.9% y/y. The common currency has also been pressured this week following ongoing concerns that Greece's fiscal position may require drastic intervention from the European Union. European Central Bank President spoke after the ECB's decision to keep rates unchanged yesterday and provided a mixed assessment of the eurozone economy. Trichet also talked up the U.S. dollar, an ongoing dialog he has had with the market that is designed to limit the amount of upside potential for euro appreciation. In U.S. news, data released today saw December consumer price inflation up a smaller-than-expected +0.1% m/m and 2.8% y/y at the headline level and 0.1% m/m and 1.8% y/y at the core level. Also, the January Empire State manufacturing index improved to 15.92 from a revised prior reading of 4.50. Additionally, December industrial production printed at 0.6% and capacity utilization improved to 72.8%. Finally, the mid-January University of Michigan consumer sentiment index receded to 72.8 from the prior reading of 72.5. Data to be released on Tuesday include net long-term TIC flows and the NAHB housing market index. Most Federal Reserve officials - but not all - have talked up the U.S. economy's recent strengthening and Fed officials are said to be reviewing ways to drain upwards of US$ 1 trillion in excess cash from the financial system. Euro bids are cited around the US$ 1.3885 level.