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The euro depreciated vis-? -vis the U.S. dollar today as the single currency tested bids around the US$ 1.3280 level and was capped around the $1.3340 level. Technically, today??™s intraday low was right around the 23.6% retracement of the move from $1.3085 to $1.3345. Traders booked profit following the impressive run-up in the common currency over the past couple of weeks. Most dealers believe the European Central Bank will move interest rates higher on Thursday by +25bps to 3.50% and comments from ECB President Trichet will be closely scrutinized. The pair lost ground on a report in the Financial Times Deutschland that the ECB may downwardly revise its inflation forecasts for 2008 to 1.8% - 1.9%, below the central bank??™s 2.0% target rate. A decline in inflationary pressures could result in less pressure on the ECB to tighten monetary policy. There is market chatter that non-French policymakers will not become overly concerned with the euro??™s appreciation until it reaches the $1.35 - $1.40 range. Trichet is scheduled to speak later today during the North American session. Data released in the eurozone today saw EMU-12 producer prices remain unchanged m/m in October and were up 4.0% y/y. In U.S. news, October pending home sales fell 1.7% from September??™s 1.1% pace. Chicago Fed President Moskow spoke today and said he believes inflation pressures will gradually recede and cited the housing sector as the biggest drag on U.S. economic growth. Euro bids are cited around the US$ 1.3245/ 15 levels.

??/ CNY

The yen weakened vis-? -vis the U.S. dollar today as the greenback tested offers around the ??115.80 level and was supported around the ??115.40 level. Technically, today??™s intraday high was right around the 23.6% retracement of the move from ??118.60 to ??114.95. Data released in Japan today saw the November monetary base decline for the ninth consecutive month, off 22.3%. Also, October employee average pay was unchanged y/y with overtime pay up 1.1% y/y. Additionally, non-financial firms??™ capital investment climbed 12.0% y/y between July and September. A Nikkei poll published today expects Bank of Japan??™s quarterly tankan survey to evidence ???slightly improved sentiment??? when it is released this month. The Nikkei 225 stock index shed 0.11% to close at ??16,303.59. Dollar bids are cited around the ??115.20/ 114.40 levels. The euro came off vis-? -vis the yen as the single currency tested bids around the ??153.65 level and was capped around the ??154.15 level. The British pound and Swiss franc weakened vis-? -vis the yen as the crosses tested bids around the ??228.15 and ??96.45 levels, respectively. The Chinese yuan appreciated sharply vis-? -vis the U.S. dollar as the greenback closed at CNY 7.8265 in the exchange-traded market, down from CNY 7.8325 and this represents a fresh post-July 2005 revaluation low for the pair. A report by JPMorgan upwardly revised its 2006 GDP growth forecast to 10.6% for China.

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The British pound gave back some recent gains vis-? -vis the U.S. dollar today as cable tested bids around the US$ 1.9725 level and was capped around the $1.9815 level. On Friday, cable came within less than two big figures of the 1992 high of $2.0035 and many traders believe it is only a matter of time before the psychologically-important $2.00 figure is challenged. Data released in the U.K. today saw November construction PMI fall to 54.8 from October??™s 58.1 level. Traders await Chancellor of the Exchequer Brown??™s pre-Budget report on Wednesday. Cable bids are cited around the US$ 1.9715/ 1.9685 levels. The euro came off marginally vis-? -vis the British pound as the single currency tested bids around the ?‚¤0.6720 level and was capped around the ?‚¤0.6740 level.

CHF

The Swiss franc weakened vis-? -vis the U.S. dollar today as the greenback tested offers around the CHF 1.1985 level and was supported around the CHF 1.1930 level. Technically, today??™s intraday high was right around the 38.2% retracement of the move from CHF 1.2115 to CHF 1.1900. A report from UBS released today predicts the Swiss economy will decelerate in 2007. U.S. dollar offers are cited around the CHF 1.2050 level. The euro and British pound gained marginal ground vis-? -vis the U.S. dollar today as the crosses tested bids around the CHF 1.5900 and CHF 2.3610 levels, respectively.

A$

The Australian dollar weakened vis-? -vis the U.S. dollar today as the Aussie tested bids around the US$ 0.7850 level and was capped around the $0.7885 level. Technically, today??™s intraday low was right around the 23.6% retracement of the move from $0.7615 to $0.7925. Data released in Australia today saw Q3 gross company profits climb 0.6% q/q and were up 8.3% y/y. Also, October building approvals receded 7.4% m/m and November ANZ job advertisements were off 3.8% m/m and up 17.1% y/y. Australian dollar bids are cited around the US$ 0.7770 level.

C$

The Canadian dollar depreciated vis-? -vis the U.S. dollar today as the greenback tested offers around the C$ 1.1455 level and was supported around the C$ 1.1415 level. Traders await tomorrow??™s interest rate decision from Bank of Canada and most expect no change in Canadian borrowing rates. U.S. dollar offers are cited around the C$ 1.1570 level.

NZ$

The New Zealand dollar came off marginally vis-? -vis the U.S. dollar today as the kiwi tested bids around the US$ 0.6850 level and was capped around the $0.6885 level. New Zealand dollar offers are cited around the US$ 0.7095 level.

Gold/ Silver

Gold gained ground vis-? -vis the U.S. dollar today as the yellow metal tested offers around the US$ 648.40 level and was supported around the $ 644.77 level. The dollar??™s recent sell-off has pushed the pair back towards the $650.00 level. Silver gained ground vis-? -vis the U.S. dollar as the pair tested offers around the US$ 14.07 level and was supported around the $14.03 level.

Crude Oil

Crude oil weakened vis-? -vis the U.S. dollar today as light, sweet NYMEX crude oil futures for January delivery tested bids around the US$ 62.57 level and was capped around the $ 63.77 level. OPEC policymakers will convene in Nigeria on 17 December and may agree on further supply cuts but not all traders are convinced this will materialize. Colder-than-normal temperatures in parts of the U.S. are said to be keeping a floor under the price.