The euro moved sharply higher vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.4750 level and was supported around the $1.4595 level. The common currency reached its highest level since 5 December after crude oil briefly traded above the US$ 100.00 figure in the over-the-counter market and U.S. equities experienced a sharp decline. Also, the U.S. manufacturing PMI survey fell to 47.7 in December from 50.8 in November, the first decline in the previous ten months and the lowest level since the U.S. invasion of Iraq in April 2003. Notably, the new orders sub-index fell sharply and the employment sub-index increased marginally to 48.0. The U.S. dollar was on the defensive today because there is increasing chatter about the likelihood of a recession in the U.S. economy. Traders await the December non-farm payrolls survey to get the latest snapshot of the labour market. The Federal Open Market Committee is expected to ease monetary policy by 25bps on 31 January and again on 18 March. In eurozone news, Germanyâ€™s DIW institute estimates German GDP growth will be around 1.8% in 2008 and 1.7% in 2009. Also, EMU-13 December manufacturing PMI printed at 52.6. German economy minister Glos said Germanyâ€™s economic risks have become larger. Euro bids are cited around the US$ 1.4465 level.
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