EURO

The euro came off vis-? -vis the U.S. dollar today as the single currencytested bids around the US$ 1.3585 level and was capped around the $1.3655level. Technically, today's intraday low was right around the 23.6% retracementlevel of the move from $1.3340 to $1.3665. The pair came within a couple pipsyesterday of establishing a fresh lifetime high that dates back to December2004.  Data released in the U.S. today causedthe pair to move lower as weekly initial jobless claims fell by 20,000 to321,000 in the week ending 21 April, below expectations, while continuingjobless claims gained 65,000 to 2.60 million. Traders bought dollars on these data ahead of next week's crucial Aprilnon-farm payrolls report. Dealers will closely monitor speeches by DallasFederal Reserve President Fisher and Federal Reserve Governor Mishkin later inthe North American session.  The Fed's BeigeBook was released yesterday and it reported sluggishness in manufacturingactivity and residential real estate activity. The Fed noted that most regions of the U.S. reported "only modest ormoderate expansions."  The Federal OpenMarket Committee will next convene on 9 May when it is expected to hold thefederal funds target rate steady at 5.25%, the rate it has been at since June 2006.  Ineurozone news, the German May GfK consumer climate index improved to 5.5from 4.4 in April.  Also, German Marchwholesale sales were up 2.0% m/m and 2.0% y/y and French business sentimentrose to its highest level in six years in April. European Central Bank memberMersch was quoted as saying interest rates remain in a "period ofnormalization??¦and are still on the accommodative side.??? Most traders expect theECB to lift interest rates by 25bps in June, taking the main refinancing rateto 4.00%.  Euro bids are cited around the$1.3540 level.

JPN/CNY

The yen lostground vis-? -vis the U.S. dollar todayas the greenback tested offers around the ??119.45 level and was supported aroundthe ??118.50 level.  Technically, today'sintraday low was just above the 38.2% retracement level of the move from ??119.85to ??117.60 and stops were hit above the ??119.30 level, representing the 76.4%retracement level of this range. Traders await Bank of Japan Policy Board??™sinterest rate decision overnight along with the central bank??™s semiannualeconomic and monetary policy outlook. Additionally, many other data including March consumer price inflationdata will be released tonight and any indication that Japan continuesto experience deflationary pressures in its economy could weaken the yenfurther.  The Nikkei 225 index gained1.12% to close at ??17,429.17.  Dollarbids are cited around the ??118.75 level. The euro reached an all-timehigh vis-? -vis the yen as the single currency tested offers around the ??162.55level and was supported around the ??161.65 level.  TheBritish pound and Swiss franc appreciated vis-? -vis the yen as the crossestested offers around the ??238.70 level and ??98.90 level, respectively.  TheChinese yuan depreciated vis-? -vis the U.S. dollar as the greenback closedat CNY 7.7263 in the over-the-counter market, up from CNY 7.7161.

STERLING

The British pound fell appreciably vis-? -vis the U.S. dollar today as cable tested bids aroundthe US$ 1.9900 figure and was capped around the $2.0060 level.  Technically, today's intraday high was rightaround the 61.8% retracement level of the move from $2.0130 to $1.9955.  Also, today's intraday low was around the23.6% retracement level of the move from $1.9185 to $2.0130. Traders bookedprofits after the release of the U.S. weekly initial job claimsdata.  A market rumour circulated thatHSBC Bank was buying as much as ?‚¤5.0 billion to meet dividendrequirements.  Data released in the U.K. today saw Nationwide April house pricesclimb 0.9% m/m and 10.2% y/y, the latest evidence that Bank of England??™sinterest rate hikes may not be slowing the U.K. economy as much as somepolicymakers would like. A government survey released today saw U.K. inflationexpectations stable at 2.5% in April for 2007, down from January's 2.7%level.  Some dealers believe thatsterling may have a difficult time reaching new recent highs because the markethas largely discounted a 25bps rate hike next month to 5.50%.  Cable bids are cited around the $1.9860level.  The euro moved higher vis-? -vis the British pound as the singlecurrency tested offers around the ?‚¤0.6830 level and was supported around the ?‚¤0.6800level.

SWISS

The Swissfranc depreciated vis-? -vis the U.S. dollar today as the greenback testedoffers around the CHF 1.2095 level and was supported around the CHF 1.2030level.  Technically, today's intradayhigh was just above the 23.6% retracement level of the move from CHF 1.2770 to CHF1.1875.  Traders await the release of theSwiss April KOF leading indicator tomorrow. Dollar offers are cited around the CHF 1.2140 level.  Theeuro gained marginal ground vis-? -vis the Swiss franc as the singlecurrency tested offers around the CHF 1.6445 level and the British pound weakened vis-? -vis the Swiss franc as sterlingtested bids around the CHF 2.4040 level.

AUD

The Australiandollar came off vis-? -vis the U.S. dollar today as the Aussie tested bidsaround the US$ 0.8265 level and was capped around the $ 0.8355 level.  Technically, today's intraday low was rightaround the 50% retracement level of the move from $0.8150 to $0.8390. Datareleased in Australiaovernight saw the February Westpac leading index climb 5.7% y/y, up fromJanuary's 4.9% rise. Notably, Reserve Bank of New Zealand raised its officialcash rate by 25 bps to 7.75% overnight, the second consecutive month thecentral bank has tightened monetary policy. Traders are split as to whether Reserve Bank of Australia willraise interest rates next month, especially following this week's benignproducer and consumer price inflation data. Australian dollar bids are cited around the US$ 0.8210 level.

CAD

The Canadiandollar weakened vis-? -vis the U.S. dollar today as the greenback testedoffers around the C$ 1.1215 level and was supported around the C$ 1.1140level.  Technically, today's intradayhigh was just below the 76.4% retracement level of the move from C$ 1.1030 to C$1.1875.  Bank of Canada GovernorDodge reported that he will not serve a second term.  Traders await the release of Bank of Canada'smonetary policy report today.  U.S.dollar offers are cited around the C$ 1.1230 level.