The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4875 level and was capped around the $1.4760 level.  The common currency continues to inch towards the psychologically-important $1.50 figure and the U.S. dollar it now at its weakest level since before the Lehman bankruptcy.  Data released in the eurozone today saw French September consumer prices decline 0.2% after climbing 0.5% last month, and were off 0.4% y/y.  Also, the German ZEW economic expectations index declined for the first time in four months, falling 1.7 points to 56.0 points.  The German media is reporting the German government will revise its latest economic forecast on Friday and an upward revision to a contraction of -4.5% is possible, up from -6.0%.  There is speculation the German economy may have grown 1% y/y.  Federal Reserve Chairman Bernanke was on the wire last week saying interest rates will need to eventually move higher but most Fed-watchers believe the Fed will keep rates unchanged for several months.  Euro bids are cited around the US$ 1.4445 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.45 level and was capped around the ¥90.20 level.  Data released in Japan today saw September bank lending up 1.6% y/y while the September M3 money supply was up 2.2% y/y.  Asian monetary authorities intervened last week by buying U.S. dollars.  Most traders believe Bank of Japan will keep interest rates unchanged for months and the major question is when the central bank will end its emergency lending programs.  The Nikkei 225 stock index climbed 0.60% to close at ¥10,076.56.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥133.25 level and was supported around the ¥132.55 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥142.20 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥87.80 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8222 in the over-the-counter market, up from CNY 6.8211.  Chinese officials have recently indicated they will stimulate domestic final private demand to reduce China's dependence on foreign trade.

GBP

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5850 level and was supported around the $1.5705 level. The European Commission today granted the U.K. permission to extend its temporary bank support programs through the end of the year.  Bank of England Monetary Policy Committee member Posen reported There are still problems out there in the banking system. It is possible we will have another banking sector-led problem in the U.S. and elsewhere.  Data released in the U.K. today saw September retail sales up 2.8% y/y while the DCLG house price index was off 5.6% in August. Also, September consumer price inflation fell to 1.1% from 1.6% in August and was unchanged m/m.  The annual decline represented the weakest rate in seven years.  These data render it likely the MPC will keep its easy monetary policy unchanged for some time.  Cable bids are cited around the US$ 1.5640 level.  The euro moved lower vis-à-vis the British pound as the single currency tested offers around the ?0.9410 level and was supported around the ?0.9345 level.

Technical Outlook at 1230 GMT (EDT + 0400)

 

          (Bid Price)        (Today's Intraday Range)    

               

EUR/ USD      1.4833                1.4876, 1.4761
USD/ JPY         89.70                  90.18,   89.44
GBP/ USD      1.5818                1.5827, 1.5706
USD/ CHF      1.0227                1.0277, 1.0192
AUD/USD       0.9081                0.9125, 0.9040
USD/CAD      1.0317                1.0367, 1.0264
NZD/USD       0.7364                0.7414, 0.7325
EUR/ JPY       133.12                133.24, 132.52
EUR/ GBP      0.9369                0.9411, 0.9345
GBP/ JPY       142.03                142.21, 141.16
CHF/ JPY         87.71                  87.81,   87.33