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The euro fell sharply vis-?-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5565 level and was capped around the $1.5785 level. The common currency came off following news of more write-downs at European financial institutions and better-than-expected U.S. economic data. Swiss banking giant UBS announced upwards of US$ 19 billion in write-downs and Germany's Deutsche Bank also announced it will be making sizable provisions to compensate for credit losses. These loss provisions suggest there could be additional problems throughout the European banking sector. European Central Bank Noyer said banks should be assured they can find liquidity in the market or from the central bank to deal with funding shortfalls. Data released in Germany today saw the March jobless total decline about 110,000 to 3.057 million with the jobless rate lower at 8.4%. Also, EMU-15 February unemployment was unchanged at 7.1% and EMU-15 March manufacturing PMI printed at 52.0. It was also reported that German February new machinery, plant orders were up 10% y/y. In U.S. news, the March ISM manufacturing index improved to 48.6 from 48.3 in February while February construction spending improved to -0.3% from -1.0% in January. Traders will pay close attention to testimony from Federal Reserve Chairman Bernanke tomorrow followed by Friday's March non-farm payrolls data. Euro bids are cited around the US$ 1.5345 level.

?/ CNY
The yen depreciated vis-?-vis the U.S. dollar today as the greenback tested offers around the ?101.45 level and was supported around the ?99.60 level. The pair reached its highest level since 13 March after the release of a weaker-than-expected Bank of Japan quarterly Tankan survey that saw the headline business sentiment index of large manufacturers fall to 11 from 19 in December, the lowest reading since December 2003. The survey also predicted the main index could fall to 7 in June. Companies of all sizes forecast a 5.3% decline in their capital investment plans in the fiscal year to March 2009, the largest decline since March 2003. Similarly, Japanese companies reduced their forecast for pretax profits to -1.6% from 1.1%. Additionally, companies see an average exchange rate of ?109.21 in the year to March 2009. BoJ's Policy Board will convene on 8-9 April and again on 30 April when the central bank will release its semi-annual outlook on the economy and prices. The Nikkei 225 stock index gained 1.04% to close at ?12,656.42. Dollar offers are cited around the ?102.15 level. The euro appreciated vis-?-vis the yen as the single currency tested offers around the ?158.30 level and was supported around the ?156.35 level. The British pound moved higher vis-?-vis the yen as sterling tested offers around the ?200.90 level while the Swiss franc weakened vis-?-vis the yen as the franc tested bids around the ?99.60 level. The Chinese yuan appreciated vis-?-vis the U.S. dollar as the greenback closed at CNY 7.0116 in the over-the-counter market, down from CNY 7.0120. Data released in China today saw the CFLP March manufacturing PMI survey improve to 58.4 from 53.4 in February.

₤
The British pound slumped vis-?-vis the U.S. dollar today as cable tested bids around the US$ 1.9725 level and was capped around the $1.9870 level. Technically, today's intraday high was right around the 50% retracement of the move from $1.9360 to $2.0395. Parliament accepted the reappointment of Bank of England Monetary Policy Committee member Sentance today. Prime Minister Brown called for a higher level of disclosures from banks. Data released in the U.K. today saw Land Registry house prices in England and Wales unchanged m/m in February. Also, it was reported that U.K. private non-financial companies saw their profitability increase to a record high of 15.5% in Q4 2007. Additionally, CIPS March manufacturing PMI was steady at 51.3 while the prices sub-indices moved higher. Cable bids are cited around the US$ 1.9605 levels. The euro weakened vis-?-vis the British pound as the single currency tested bids around the ₤0.7870 level and was capped around the ₤0.7955 level.

CHF
The Swiss franc depreciated vis-?-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0140 level and was supported around the CHF 0.9930 level. Data released in Switzerland today saw March PMI fall to 55.3 from 60.5 in March. Traders are also talking about them massive write-down announced today by UBS. U.S. dollar offers are cited around the CHF 1.0375 level. The euro and British pound moved higher vis-?-vis the Swiss franc as the crosses tested offers around the CHF 1.5790 and CHF 2.0030 levels, respectively.