EURO
The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3225 level and was capped around the US$ 1.3420 level. U.K. newspaper The Times reported the International Monetary Fund may forecast that banks’ toxic debts could reach US$ 4 trillion globally. European Central Bank member Stark critically said the Group of Twenty’s decision to increase the usage of Special Drawing Rights is like “creating helicopter money for the globe.” The ECB reiterate it is not changing its requirements for countries to start using the euro, contrary to an International Monetary Fund report that calls for changes that would allow Central and Eastern European countries to qualify for euro usage under different terms. A compromise being discussed may allow Central and Eastern European countries’ bonds to be accepted as collateral by the ECB in exchange for euro liquidity. Data released in the eurozone today saw Q4 2008 gross domestic product downwardly revised to -1.6% from the previous reading of -1.5%. A joint survey from Germany’s Ifo and France’s INSEE said the eurozone economy could contract 1.9% q/q in Q1 2009. In U.S. news, Federal Open Market Committee meeting minutes will be released tomorrow. Euro bids are cited around the US$ 1.3100 figure.
JPY / CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥99.85 level and was capped around the ¥101.10 level. Bank of Japan’s Policy Board voted unanimously to keep interest rates unchanged at 0.1% so that the efficacy of previous monetary easing measures can be evaluated. The central bank also kept its economic assessment unchanged for the month of April, repeating its statement that the economy “has deteriorated significantly” due to a “worsening in corporate profits and weakening domestic demand.” Dealers are also awaiting details of the government’s proposed US$ 100 billion stimulus package that will be announced on Friday. The Nikkei 225 stock index lost 0.28% to close at ¥8,832.85. 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 ¥132.20 level and was capped around the ¥135.55 level. The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥145.80 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥87.05 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8361 in the over-the-counter market, up from CNY 6.8343.
STERLING
The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4580 level and was capped around the $1.4775 level. Data released in the U.K. saw February manufacturing output decline for the twelfth consecutive month, off 0.9% m/m and 13.8% y/y. Also, February industrial production was off 1% m/m and 12.5% y/y. Cable bids are cited around the US$ 1.4515 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8990 level and was capped around the ₤0.9115 level.
