EUR Moved Lower VS. The USD

The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4270 level and was capped around the $1.4360 level. The common currency fell to three-month lows on U.S. economic recovery signs and an improved economic outlook from the Fed. Some dealers believe the Fed is inching closer to removing more of its monetary stimulus measures.

Data releaseed in the U.S. today saw the December ISM Chicago headline business barometer imporve to 60.0 from 56.1 in November, approaching a four-year high. Recently, the U.S. dollar has started to benefit from improving U.S. economic fundamentals, a reversal from earlier in the year when the greenback failed to markedly improve from better fundamentals. In eurozone news, EMU-16 bank lending declined 0.7% m/m last month, the third consecutive month of declines.

Also, the EMU-16 M3 money supply fell by 0.2% y/y, far below the forecast. The euro’s share of global foreign reserves has risen to all-time highs according to the International Monetary Fund. The euro’s share of global foreign reserves is now at 27.7% whereas the U.S. dollar’s weighting has falledn to 61.6%.