The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3965 level and was supported around the $1.3885 level.  The common currency gained some ground on news the European Commission will support Greece's deficit-reduction program that will be published tomorrow.  Greece's budget deficit was 12.7% of GDP last year and is struggling to convince the markets it can bring that down to 3% by 2012.  Greek debt is now trading at a massive 400bps premium at the ten-year level over German bunds, the highest level since 1998.  Most traders expect the European Central Bank will keep monetary policy unchanged on Thursday.  Data released in the eurozone today saw EMU-16 producer price inflation up 0.1% m/m and off 2.9% y/y.  Also, January PMI construction improved to 48.6 from 47.1 and German December retail sales were up 0.8% m/m and off 2.5% y/y.  Some dealers were spooked into selling the euro last night after Reserve Bank of Australia surprised the markets by not raising interest rates last night on the premise that higher-yielding currencies like the Australian dollar could be weaker.  ECB member Weber today said fiscal consolidation is the main challenge in 2010 and said he expects a slight worsening of the German labour market in 2010.  He also said Germany will not experience a recovery before 2011 and added the economic recovery in 2010 increasingly depends on exports.  In U.S. news, traders will pay close attention to testimony today from former Fed Chairman Volcker who will indicate hedge funds and private equity funds should be allowed to profit and fail.  Volcker is also a proponent of limiting the size of banks so that none are too big to fail and create unmanageable systemic risk.  Data released in the U.S. today saw December pending home sales print as expected at 1.0% m/m and up 10.5% y/y.  Tomorrow's data will include MBA mortgage applications, January Challenge job cuts, and January ISM non-manufacturing data.  The big news this week will be Friday's January non-farm payrolls data.  Some dealers believe the U.S. jobs report will show some improvement following a bit of an economic bounce the economy received at the end of Q4 2009.  Treasury Secretary Geithner today reported small banks remain under enormous pressure and said the proposed additional fee on banks will not impact lending.  Euro bids are cited around the US$ 1.3740 level.