€ The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2365 level and was supported around the $1.2140 level. One catalyst for the move higher was a rumour – later denied by the Greek government – that Greece was considering leaving the European Union and the eurozone. Even though Greece only accounts for 2% to 3% of economic output in the European Union, its bailout package represents a considerably higher and disproportionate share of the total financial assistance package that has been announced by the European Union and the International Monetary Fund. Most traders believe the expulsion or removal of a eurozone country would precipitate a run on the euro as confidence and sentiment would be badly damaged. Many dealers are struggling to reconcile why the euro moved higher in the face of the Greek rumour but technicians note that the common currency is significantly oversold and with sentiment so poor, the slightest positive news or data can engender a move higher by the common currency. Another reason being cited for the euro's rise is a market rumour that the European Central Bank may intervene and purchase euro whereas some traders are indicating Swiss National Bank sold francs for euro today. Also, the common currency gained ground on a plea from ECB member and Bundesbank President Weber that Germany's parliament approve Germany's contribution to the European Union rescue fund. ECB member Bini-Smaghi said EMU-16 inflation expectations remain well-anchored and added the ECB will "not bail out states." IMF official Lipsky reported the euro is "near equilibrium" and its level is not a problem. Data released in the eurozone today saw EMU-16 March construction output up 7.6% m/m and off 5.2% y/y. In U.S. news, U.S. Treasury Secretary Geithner was on the tape yesterday and reported the U.S.'s economic recovery is " [...]
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