The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3530 level and was capped around the $1.3695 level. The common currency continues to retreat lower as risk aversion becomes heightened. Greek credit default swaps for five and ten year sovereign debt continue to widen as do the default swaps for Spain, Portugal, Italy, and Ireland. Traders generally believe yesterday's announcement by European Union leaders lacks teeth insofar as it did not commit a specific level of capital to confront Greece's financial difficulties. The most likely scenario, however, is that Greece will eventually receive bilateral aid from at least one eurozone country, with Germany the likely guarantor. European Central Bank President Trichet said he will work with the European Commission on proposals for additional Greek measures. ECB member Stark said a lot of ideas being suggested to help Greece are counterproductive. In addition to the threat of contagion to other eurozone countries, dealers are paying close attention to the resumption of escalating credit risk in the Middle East. Dubai credit default swaps are 18 bps wider today and some traders are speculating the emirate could be facing bankruptcy. There is also a fear that Dubai credit jitters could spread to other countries around the Gulf. Data released in the eurozone today saw Q4 2009 gross domestic product climb a weaker-than-expected +0.1% q/q. Also, French Q4 2009 GDP came in stronger-than-expected at +0.6% q/q and German Q4 GDP printed flat q/q, below forecasts. Additionally, it was reported that EMU-16 December industrial production was off 1.7% m/m and off 5.0% y/y. In U.S. news, January retail sales were up a stronger-than-expected 0.5% with the ex-autos component up 0.6%. Also, the preliminary February University of Michigan consumer sentiment indicator fell to 73.7 from the prior reading of 74.7. Euro bids are cited around the US$ 1.3530 level.