The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3770 level and was supported around the $1.3655 level. As expected, the Federal Open Market Committee kept its benchmark federal funds target rate unchanged at 0.25%. The FOMC reported Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral. Kansas City Fed President Hoenig dissented with the decision, arguing that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability. Data released in the U.S. today saw February housing starts off 5.9% to an annualized 575,000 units while February building permits were off 1.6% m/m to an annualized 612,000. Also, the February import price index was off 0.3% m/m and up 11.2% y/y. Data to be released in the U.S. tomorrow include February producer price inflation data. In eurozone news, Standard & Poor's affirmed Greece's BBB+ credit rating and removed the country from creditwatch negative. Eurozone finance ministers last night reiterated their plan to take coordinated action but did not provide much additional information other than to suggest any assistance would take the form of bilateral loans rather than loan guarantees. Data released in the eurozone today saw the EMU-16 consumer price index expand 0.3% while the core consumer price index expanded 0.4% m/m, up from -0.1% in January; consumer prices were also up 0.9% y/y. Also, the EMU-16 March ZEW economic sentiment survey fell to 37.9 from the prior reading of 40.2. The German March ZEW survey's economic sentiment and current situation indices improved to 44.5 and -51.9, respectively. European Central Bank member Stark called on more regulation for credit default swaps and called on countries to improve their fiscal finances. Euro bids are cited around the US$ 1.3335 level.