GCI Forex Research<\/p>\n
\u20ac<\/strong><\/p>\n The euro moved lower vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2565 level and was capped around the $1.2690 level.\u00a0 Traders are talking about the Obama administration\u2019s possible purchase of up to 40% of Citigroup\u2019s shares.\u00a0 Speculation remains rampant the government may decide to nationalize some U.S. financial institutions with Citigroup and Bank of America cited as the two top candidates. The government and Federal Reserve released a joint statement today that reiterates they will work together to make sure banks are sufficiently capitalized and said they will conduct stress testing beginning this week to see how well capitalized banks are.\u00a0 Fed Chairman Bernanke will testify before Congress this week and the markets are looking for him to sound more optimistic than he did last week when he notes recent economic numbers have been \u201cdismal.\u201d\u00a0 Data released in the U.S. today saw the Chicago Fed\u2019s national activity index decline to -3.41 in the three months ending in January, its lowest level in 34 years.\u00a0 In eurozone news, European Central Bank member Gonzalez-Paramo reported \u201cOur focus is on price stability.\u00a0 We have undone 30 months of rate increases in just three months. We have succeeded in anchoring inflationary expectations.\u201d\u00a0 Eurogroup Chairman Juncker reported \u201cI don’t see the risk of member countries of the euro-zone defaulting. In any case, the member states which might be at risk know that they (are) responsible for dealing with their budgetary and economic difficulties. But this question is not an issue.\u00a0 Responsibility is national when it’s a matter of avoiding risk of defaulting on payments otherwise the E.U. and the euro zone in particular has always managed to deal with emergencies of the kind you raise. But I do not see any imminent danger.\u201d\u00a0 ECB member Draghi reported \u201cAction must focus simultaneously on the three pillars of fiscal, monetary and financial stability policies.\u00a0 Worrying about getting too close to the lower limit for nominal interest rates cannot be a reason for inaction. Rapid disinflation must not be allowed to turn into deflation.\u201d Euro bids are cited around the US$ 1.2475 level.<\/p>\n \u00a5\/ CNY<\/strong><\/p>\n The yen depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the \u00a594.95 level and was supported around the \u00a592.75 level.\u00a0 The yen was given across the board as traders priced in additional economic weakness in Japan with most economists estimating a very weak end to the fiscal year at the end of next month.\u00a0 Many Japanese economic data will be released on Friday including retail sales, consumer price inflation, and industrial production data.\u00a0 The Nikkei 225 stock index lost 0.54% to close at \u00a57,376.16.\u00a0 U.S. dollar offers are cited around the \u00a5104.15 level.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5121.90 level and was supported around the \u00a5119.05 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5139.10 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a581.80 level.\u00a0 The Chinese yuan appreciated vis-\u00e0-vis the U.S. dollar as the greenback closed at CNY 6.8355 in the over-the-counter market, down from CNY 6.8367.<\/p>\n