The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5790 level and was supported around the $1.5740 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from $1.6020 to $1.5280. Liquidity was reduced today on account of market holidays in the U.K. and U.S. Traders will pay close attention to Germany’s consumer price inflation data scheduled to be released tomorrow followed by the flash EMU-15 May CPI rate on Friday. Some economists’ estimates suggest eurozone inflation may have reached 3.6% this month, up from 3.3% in April. A print this strong will all but force the European Central Bank to remain hawkish in its monetary policy stance. ECB’s Trichet was quoted as saying the various economic shocks the global economy has faced are “clearly not over.” ECB’s Gonzalez-Paramo reported eurozone banks have not become “addicted” to the ECB’s liquidity injections. ECB Vice President Papademos reported “Indeed, the substantial and continuing increase in the price of oil has contributed to the deceleration in the rate of economic growth in the euro area. But, at the same time, it has intensified inflationary pressures," he added. "Inflation in the euro area, which reached 3.3% in April, is expected to remain at a level significantly higher than 2% for the subsequent months and will gradually moderate in the course of 2008.” Traders await U.S. new home sales and consumer confidence data tomorrow. Euro bids are cited around the US$ 1.5230 level.

The yen depreciated marginally vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥103.50 level and was supported around the ¥103.10 level. Today’s range was very limited on account of market holidays in the U.K. and U.S. Traders await the release of nationwide consumer price inflation data for April and Tokyo-area May inflation data on Friday. The government is not expected to submit a new candidate this week for the vacant Bank of Japan Deputy Governor position. The BoJ is expected to keep the overnight call rate unchanged at 0.50% for the foreseeable future. The Nikkei 225 stock index lost 2.30% to close at ¥13,690.19. Dollar bids are cited around the ¥103.00/ 101.35 levels. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥163.25 level and was supported around the ¥162.75 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥205.15 and ¥101.00 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.9360 in the over-the-counter market.

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9830 level and was supported around the $1.9755 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from $2.0025 to $1.9360. U.K. markets were closed for the long weekend market holiday. Data released in the U.K. today saw Hometrack May property prices fall -1.9% y/y from -0.9% in April, the eighth consecutive monthly decline. Cable bids are cited around the US$ 1.9360/ 1.9100 levels. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.7945 level and was capped around the ₤0.7970 level.

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0275 level and was supported around the CHF 1.0230 level. The April UBS consumption indicator will be released tomorrow. U.S. dollar offers are cited around the CHF 1.0760 level. The euro and British pound appreciated vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6185 and CHF 2.0340 levels, respectively.