EURO
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3665 level and was supported around the US$ 1.3525 level. U.S. equity markets retraced some of yesterday’s losses, boosting economic sentiment and caused traders to chase higher-yielding currencies. Data released in the U.S. today saw weekly initial jobless claims climb 32,000 last week to 637,000 while. Also, April producer prices were up 0.3%, defying expectations of a 0.1% climb. Some dealers believe all of the fiscal and monetary stimuli in the economy could engender a nasty bout of inflation and erode the value of the dollar. The core producer price index was up +0.1%. Continuing jobless claims were up 202,000 to 6.56 million, the highest level since at least 1967. In eurozone news, many economic data will be released tomorrow including first quarter German and French gross domestic product data and eurozone consumer price inflation data. Euro bids are cited around the US$ 1.2765 level.
JPY / CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥95.85 level and was supported around the ¥95.10 level. Risk appetite returned to the market as traders moved into higher-yielding currencies. The Japanese media reported the Cabinet Office is planning to upwardly revise its assessment of the economy later this month, possibly noting the pace of deteriorating is moderating. The government may report the economy has bottomed out and would represent the government’s first upward revision since February 2006. Last month’s report indicated “The economy is worsening rapidly and is in a severe situation. The pace of worsening is expected to moderate as inventory adjustment progresses.” Earlier this month, it was reported industrial production evidenced its first monthly increase in six months. The Nikkei 225 yesterday stock index lost 2.64% today to close at ¥9,093.73. U.S. dollar offers are cited around the ¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥130.90 level and was supported around the ¥128.85 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥146.15 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥86.90 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8250 in the over-the-counter market, up from CNY 6.8225.
