The euro depreciated marginally vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2965 level and was capped around the US$ 1.3040 level. The common currency moved higher early in the North American session as traders continue to evaluate the growing global swine flu crisis. Dealers are also paying very close attention to the U.S. financial sector following a Wall Street Journal story the U.S. government will ask Citigroup and Bank of America to raise billions more in capital after the results of the banks’ stress tests are released next Monday. Most of the nineteen largest banks in the U.S. are said to be well-capitalized but there will definitely be cases where the government strongly encourages the banks to raise additional capital and this expectation could hang heavily over the market for the next several days. The World Health Organization lifted its level of influenza pandemic alert to “phase four” from “phase three,” evidencing an increasing likelihood the risk of a pandemic has increased. Data released in the U.S. today saw the February S&P Case-Shiller home price index off 18.6% while Redbook retail sales were up +1.6% m/m in the first three weeks of April. Other data to be released today include April consumer confidence and the April Richmond Fed manufacturing index. In eurozone news, traders are speculating Germany’s consumer price index may have increased in April after data from four of the country’s regions showed higher price pressures. Also, French consumer confidence ticked up in April. Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥95.60 level and was capped around the ¥96.75 level. Data released in Japan overnight saw March overall retail sales off 3.9% y/y, the seventh consecutive month of declines. Despite ongoing poor economic data, the yen continues to power higher on account of a worsening of the global swine flu contagion, an economic and health risk that risks becoming a global pandemic. The Nikkei 225 stock index lost 2.67% to close at ¥8,493.77. U.S. dollar offers are cited around the ¥104.15 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥124.35 level and was capped around the ¥126.05 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥139.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥82.65 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8270 in the over-the-counter market, down from CNY 6.8275.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4685 level and was supported around the $1.4515 level. Data released in the U.K. saw the April CBI distributive trades survey improve markedly to +3 in April from -44 in March, a fifteen-month high. The U.K. Treasury reported there is a low risk of deflation in the U.K. Cable bids are cited around the US$ 1.4350 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8970 level and was supported around the ₤0.8880 level.