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The euro appreciated vis-?-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5415 level and was supported around the $1.5285 level. Technically, today's intraday high was right around the 38.2% retracement of the move from $1.4440 to $1.6020. The common currency erased earlier intraday losses after European Central Bank President Trichet stated "Upside risks to price stability prevail over the medium term." As expected, the ECB kept its main refinancing rate unchanged at 4.0% and Trichet also indicated downside economic growth risks could impact the EMU-15 economy more than expected. Traders are split as to whether or not the ECB will be forced to reduced interest rates later this year. Data released in Germany today saw industrial production of 0.5% m/m in March. Eurogroup chairman Juncker reported "the financial crisis isn't over" but added "Europe is withstanding this external shock and it would withstand it less if it didn't have the common currency. It protects us from external shocks, from the terrible rise in oil prices." In U.S. news, Treasury Secretary Paulson reported the U.S. economy is "closer to the end (of the financial market turmoil) than the beginning." Data released in the U.S. today saw weekly initial jobless claims off 18,000 to 365,000 while continuing jobless claims fell 10,000 to 3.02 million. Also, March wholesale inventories were off 0.1%, defying expectations of a rise. There is a shifting view in the markets that suggests the Federal Reserve may actually be raising interest rates by the end of the year. Euro bids are cited around the US$ 1.5230 level.

?/ CNY
The yen appreciated vis-?-vis the U.S. dollar today as the greenback tested bids around the ?103.65 level and was capped around the ?104.95 level. Technically, today's intraday low was just below the 61.8% retracement of the move from ?108.60 to ?95.70. The yen strengthened across the board as traders unwound additional short yen carry trades. Most dealers believe Bank of Japan's Policy Board will keep the overnight call rate unchanged at 0.50% for several months. Traders await the release of the leading and coincident indices tonight. The Nikkei 225 stock index lost 1.13% to close at ?13,943.26. Dollar bids are cited around the ?103.65/ ?101.35 levels. The euro came off vis-?-vis the yen as the single currency tested bids around the ?159.05 level and was capped around the ?161.25 level. The British pound and Swiss franc moved lower vis-?-vis the yen as the crosses tested bids around the ?202.35 and ?98.25 levels, respectively. The Chinese yuan depreciated vis-?-vis the U.S. dollar as the greenback closed at CNY 7.0052 in the over-the-counter market, up from CNY 6.9871. One-year dollar non-deliverable forwards moved higher to CNY 6.6030 from 6.5046 on Wednesday.

₤
The British pound appreciated vis-?-vis the U.S. dollar today as cable tested offers around the US$ 1.9620 level and was supported around the $1.9500 figure. The pair established a multi-week low dating to 21 February before gaining ground. As expected, Bank of England's Monetary Policy Committee kept its main repo rate unchanged at 5.00% and the markets are now pricing in a 25bps reduction to 4.75% in June. Think-tank NIESR reported U.K. GDP growth grew 0.4% during the quarter to April, the same rate as the three months to March. NIESR also warned GDP growth could slow this month. Cable bids are cited around the US$ 1.9360 level. The euro weakened vis-?-vis the British pound as the single currency tested bids around the ₤0.7820 level and was capped around the ₤0.7885 level.

CHF
The Swiss franc appreciated vis-?-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0495 level and was capped around the CHF 1.0625 level. KOF reported Swiss GDP growth will likely remain strong in H2 2008. In April, KOF affirmed its previous forecast of Swiss GDP growth of 2.1% in 2008. Data released in Switzerland today saw the April unemployment rate remain unchanged at 2.6%. U.S. dollar offers are cited around the CHF 1.0760 level. The euro and British pound weakened vis-?-vis the Swiss franc as the crosses tested bids around the CHF 1.6170 and CHF 2.0555 levels, respectively.