The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3585 level and was supported around the $1.3460 level. The common currency extended recent gains and reached its highest level since 19 March as traders continued to cover shorts that were put on following heightened sovereign credit woes in the eurozone in the first quarter. Data released in the eurozone today saw German March PMI improve to 60.2 while EMU-16 PMI improved to 56.6. Today's data are consistent with other recent economic data that confirm Germany - the eurozone's largest economy - continues to drive economic growth in the bloc. On a negative note, German retail sales fell 0.4% m/m and were off 0.9% y/y. Liquidity is expected to remain quite thin tomorrow and Monday in the eurozone and the United Kingdom for the Easter and Passover holidays. Traders remain fixated on Greece's debt woes with a new wave of skepticism regarding the country's ability to successfully reduce its fiscal deficits and refinance its maturing debt in the second quarter. European Central Bank member Kranjec reported the European Union won't do anything special to support Greece. In U.S. news, March Challenger jobs cuts were off 55.0% y/y and weekly initial jobless claims fell to 439,000 from the revised print of 445,000. Continuing jobless claims were narrowly lower at 4.662 million. Other data released today saw the March ISM manufacturing index improve more-than-expected to 59.6 from the prior reading of 56.5. Also, the March prices paid index was up significantly at 75.0 from the prior reading of 67.0. Tomorrow's March non-farm payrolls data will cap an abbreviated trading week. Many economists are calling for job growth around the +185,000 area and upward revisions to recent months' data but some are questioning how many job gains could be due to temporary factors such as the U.S. census. U.S. Treasury Secretary Geithner warned it will be some time before large sustainable increases in jobs growth will be seen. New York Fed President Dudley reported near term inflation will remain low and said muted U.S. economic growth will warrant low rates. Euro bids are cited around the US$ 1.3335 level.
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