The dollar rose, reaching a three-month high against the euro after a report showed that retail sales in the U.S. in February increased considerably, registering with the largest increase in the past five months, and improve the prospects for the world's largest economy. Commerce Department data showed that retail sales and the sale of food in February rose by 1.1% and adjusted for seasonal variations were 421.40 billion. Sales growth has been observed for the fourth month in a row, and this is their biggest increase since September. Economists had expected sales growth of 0.5%. The January figure was revised upwards from 0.1% to 0.2%. Compared with the same period last year, sales increased by 4.6%. The jump in prices for the most part was secured higher prices for gasoline and an increase in car sales. Sales growth at gas stations was 5.0%, compared with a gain of 0.7% in the previous month.

The single currency weakened as Italian borrowing costs increased. Note that today the Italian Treasury held the first auction after the downgrade, during which the country has sold bonds worth 6,993 billion against a target value 7.25 billion. Bonds with a term expiration in 2015 in the amount of 3.323 billion have been sold at yield 2.48% vs. prev. 2.30% paper expiring in 2017 in the amount of 1.028 billion euros - at yield 2.95% vs. prev. 2.55% bonds expiring in 2018 in the amount of 642 million euros - at 3.03% yield, finally, a paper with a term expiration in 2018 of $ 2 billion - with yield 4.9%.

Japan's currency has increased compared to the majority of its most traded currencies, after the country's largest opposition party said it would vote against a potential deputy head of the Bank of Japan Kiku Iwata, which stands for acceleration easing.

Swiss franc fell against the euro, as many market participants are waiting for the meeting of the National Bank of Switzerland on the issue of monetary policy, which could be considered measures that could help stop the deflation and stimulate economic growth.

The New Zealand dollar fell against the dollar on speculation of a drought in the country will have a negative impact on the economy. The impact of the currency is the fact that many traders are waiting for the announcement of interest rate decisions of the Reserve Bank of New Zealand.

The pound rose against the euro amid what many analysts have noted that the decline of 6.5% per cent this year was excessive, which increases the possibility that the government will delay the fiscal austerity measures in the budget next week.

Employment in France's non-farm sector decreased at a steady pace in the fourth quarter, data released by statistical office Insee showed Wednesday.

The number of employees in the market sector, excluding the farm division, decreased 0.3 percent sequentially to around 15.96 million in the fourth quarter, unchanged from the decline recorded in the third quarter.

Employment in the manufacturing sector dropped 0.3 percent from the preceding quarter. Payroll numbers in the construction sector and services decreased by 0.5 percent and 0.2 percent respectively.

Temporary employment dropped 1.8 percent during the quarter, following the 5.3 percent fall seen in the three months ended September. Excluding temporary work, the number of jobs decreased by 35,300.

Compared to the fourth quarter of 2012, non-farm payroll numbers decreased 99,500 in the fourth quarter, data showed.

U.S. business inventories jumped in January, a sign that companies may have anticipated stronger sales in future months.

Total inventories rose 1.0% to a seasonally adjusted $1.642 trillion, the Commerce Department said Wednesday. Economists surveyed by Dow Jones Newswires had forecast a 0.5% increase.

January sales, meanwhile, fell by 0.3% to a seasonally adjusted $1.269 trillion.

Businesses often stockpile goods if they expect demand to rise, though too much inventory can become an unwanted expense. Fuller warehouses also contribute to gross domestic product, the broadest measure of economic output. Falling private inventories subtracted 1.55 percentage points from fourth-quarter GDP, when the economy grew at an anemic 0.1% pace.

Growth is expected to accelerate this quarter, helped by inventory accumulation.

Wednesday's report showed inventories for manufacturers were up 0.5% and wholesalers 1.2%.

Retail inventories grew 1.5%, led by auto dealers, building supply and general merchandise stores.

A separate Commerce Department report Wednesday said retail sales rose 1.1% in February, driven in part by higher gasoline prices, as well as spending on autos and building supplies.

The inventory report showed that the amount of goods on hand relative to sales was 1.29 in January, the highest level since November 2009. The inventory-to-sales ratio measures how many months it would take for a firm to sell its current inventory.

EUR/USD $1.2825, $1.2950, $1.3000, $1.3050, $1.3100, $1.3110, $1.3120

USD/JPY Y95.00, Y96.00, Y96.50

GBP/USD $1.4925, $1.5000, $1.5175, $1.5250

EUR/CHF Chf1.2310, Chf1.2350

AUD/USD $1.0200, $1.0250, $1.0270, $1.0300

NZD/USD $0.8260

GBP/CAD C$1.5500

With sales at gas stations showing a significant increase, the Commerce Department released a report on Wednesday showing that U.S. retail sales increased by more than expected in the month of February.

The report said retail sales surged up by 1.1 percent in February after edging up by 0.2 percent in January. Economist had been expecting sales to increase by about 0.5 percent.

The bigger than expected increase in sales in February was due in large part to a 5.0 percent jump in sales by gas stations, which came on the heels of a 0.7 percent increase in the previous month.

EUR/USD

Offers $1.3095/100, $1.3075/80

Bids $1.3000, $1.2955/50, $1.2935/25, $1.2900, $1.2880, $1.2865-50

GBP/USD

Offers $1.5050/60, $1.5000/10, $1.4980/85

Bids $1.4925/20, $1.4830/20, $1.4800, $1.4790, $1.4760/50

AUD/USD

Offers $1.0400, $1.0380/85, $1.0340/50

Bids $1.0280/75, $1.0240, $1.0200, $1.0170/60, $1.0150

EUR/GBP

Offers stg0.8830, stg0.8800

Bids stg0.8675/70, stg0.8650, stg0.8575/70

EUR/JPY

Offers Y126.10, Y125.80/00, Y125.50/60, Y125.20, Y124.85/90

Bids Y124.40, Y124.20, Y124.00, Y123.50

USD/JPY

Offers Y97.00, Y96.35/40, Y96.00/10

Bids Y95.20, Y95.00

Import prices in the U.S. rose by much more than expected in the month of February, according to a report released by the Labor Department on Wednesday, with the price growth largely due to a jump in fuel import prices.

The Labor Department said import prices jumped by 1.1 percent in February following a 0.6 percent increase in January. Economists had been expecting import prices to increase by 0.6 percent.

The report also showed that export prices rose by 0.8 percent in February after edging up by 0.3 percent in the previous month. Export prices had been expected to inch up by 0.2 percent.

06:30 France Non-Farm Payrolls (Finally) Quarter IV -0.2% -0.2% -0.2%
07:45 France CPI, m/m February -0.5% +0.5% +0.3%
07:45 France CPI, y/y February +1.2% +1.2% +1.2%
10:00 Eurozone Industrial production, (MoM) January +0.9% -0.1% -0.4%
10:00 Eurozone Industrial Production (YoY) January -2.4% -2.0% -1.3%
12:30 U.S. Retail sales February +0.2% +0.5% +1.1%
12:30 U.S. Retail sales excluding auto February +0.4% +0.2% +1.0%
12:30 U.S. Import Price Index February +0.6% +0.5% +1.1%

The yen strengthened for a second day against the dollar as a lack of unity among Japanese lawmakers for the government’s picks to run the central bank damped speculation for accelerated monetary easing.
Japan’s currency rose versus all its 16 major peers and bullish bets on the yen in the options market climbed to a nine- month high after the largest opposition party said yesterday it would vote against deputy governor nominee Kikuo Iwata, who advocates more easing.
The Your Party said today it will oppose Haruhiko Kuroda’s nomination for BOJ governor and Hiroshi Nakaso for deputy, while supporting Iwata. The Japan Restoration Party said it will endorse Kuroda and Iwata and oppose Nakaso. The main opposition Democratic Party of Japan said yesterday it opposed Iwata because he advocates changing the central bank law to give the government more control in setting policy.
The euro weakened as Italian borrowing costs rose at a debt sale. The euro fell for a second day against the dollar after Italian borrowing costs increased at a debt sale amid concern a political deadlock in the country will derail plans to implement austerity measures. Italy sold 3.32 billion euros of a 2015 note at 2.48 percent, up from the 2.30 percent at the prior auction on Feb. 13. The Treasury sold 2 billion euros of securities maturing in 2028 at 4.90 percent versus with 4.805 percent when the bonds were sold via banks on Jan. 15.

EUR / USD: during the European session the pair fell to $ 1.2994 and continued to fall after data on U.S. retail sales

GBP / USD: during the European session, the pair rose to $ 1.4981

USD / JPY: during the European session the pair fell to Y95.47 and recovered after data on U.S. retail sales to Y95.65

At 14:00 GMT the United States will report on changes in stocks in commercial warehouses for January. At 17:00 GMT the U.S. puts 10-year bonds. At 20:00 GMT we will know the decision of the Reserve Bank of New Zealand Interest Rate. Also this time, the press conference of the Reserve Bank of New Zealand, and will be presented to the accompanying statement and the minutes of the monetary policy of the Reserve Bank of New Zealand.

Eurozone's industrial production decreased further in January, though at a slower rate than in the previous month, data released by statistical office Eurostat showed Wednesday.

Industrial production decreased 1.3 percent on an annual basis in January, slower than the 1.7 percent decease seen in December. Economists had forecast output to decrease 2 percent.

Among industrial sub-groups, production of intermediate goods fell 3.1 percent annually, and capital goods output dropped 2.6 percent. Production of durable consumer goods fell 5.5 percent from a year earlier, while output of non-durable consumer goods rose 3.1 percent. There was a 0.9 percent rise in energy production.

Overall production in the European Union (EU) decreased 1.7 percent from a year earlier, after falling 1.8 percent in December.

On a monthly basis, industrial output decreased 0.4 percent in January, reversing the previous month's 0.9 percent increase. Economists were looking for a 0.1 percent decline.

In the European Union, industrial output decreased 0.4 percent month-on-month, following December's 0.8 percent growth, data showed.

European stocks declined as companies from Inditex SA to Adecco SA reported earnings that trailed analyst estimates.

A report from Luxembourg showed industrial production in the euro area fell more than estimated. Output dropped 0.4 percent in January, after increasing a revised 0.9 percent in December, data from the European Union’s statistics office showed. Economists in a survey had projected a drop of 0.1 percent in January.

Inditex dropped 2.8 percent to 105.40 euros in Madrid. The retailer reported a 12 percent decline in net income to 705 million euros ($919 million) in the three months through January. The average of analyst forecasts in a Bloomberg survey called for 716 million euros.

Adecco lost 4 percent to 52.50 Swiss francs in Zurich after the world’s largest provider of temporary workers posted reported fourth-quarter net income of 35 million euros, missing the average analyst estimate of 82.8 million euros. Sales were in line with forecasts.

Enel fell 4.8 percent to 2.65 euros in Milan after the company reported a slump in profit and said earnings won’t recover until 2017 as taxes and weakening power demand in its biggest markets crimp growth.Net income fell to 865 million euros from 4.1 billion euros a year earlier. Earnings before interest, tax, depreciation and amortization slid 4.9 percent to 16.7 billion euros and will hold steady until rising to as much as 18 billion euros in 2017.

FTSE 100 6,457.57 -53.05 -0.81%

CAC 40 3,824.23 -15.74 -0.41%

DAX 7,951.48 -14.64 -0.18%

Italy sold E1.67bln CCTeu vs target E1.0bln-E1.75bln

- E1.028bln of June 2017 CCTeu; avg yield 2.95% (2.55%), cover 1.5 (1.39)

- E642mln of Apr 2018 CCTeu; avg yield 3.03%, cover 1.84.

Italy sold E2.0bln 15Y BTP vs target E1.5bln-E2.0bln

- E2.0bln of 4.75% Sep 2028 BTP; avg yield 4.90% (4.805%), cover 1.28.

Italy sold E3.323bln 3-yr BTP vs target E2.5bln-E3.5bln

- E3.323bln of 2.75% Dec 2015 BTP; avg yield 2.48% (1.30%), cover 1.28 (1.37).

France's EU harmonized inflation decelerated to the lowest level in more than three years in February, data released by statistical office Insee showed Wednesday.

Inflation as per the harmonized index of consumer prices (HICP) dropped to 1.2 percent in February from 1.4 percent in January. Economists expected inflation to ease to 1.3 percent. The latest figure was the lowest since December 2009, when prices moved up 1 percent.

On a monthly basis, the HICP rose 0.3 percent in February, after falling 0.6 percent in the previous month. Economists were looking for a faster increase of 0.4 percent.

At the same time, inflation as per the consumer price index dropped to 1 percent in February from 1.2 percent in January. Economists had forecast the figure to remain unchanged from the previous month.

Month-on-month, consumer prices edged up 0.3 percent in February, slower than 0.5 percent rise expected by economists. This followed a 0.5 percent fall in January.

Core inflation, adjusted for volatile items, weakened modestly to 0.6 percent in February from 0.8 percent in January. Month-on-month, core consumer prices dropped 0.2 percent.

EUR/USD $1.2825, $1.3050, $1.3100, $1.3120

USD/JPY Y95.00

GBP/USD $1.4925, $1.5000, $1.5175, $15250

EUR/CHF Chf1.2310, Chf1.2350

AUD/USD $1.0200, $1.0250

GBP/CAD C$1.5500

The yen rose against the dollar, recording with the first fortified in the past five days as an opposition representative said that his party would oppose a candidate for the position of Deputy Governor of the Bank of Japan Iwata, which investors view as the one who stands for easing monetary policy .

The euro fell against the dollar, losing previously won positions on the background that the German Finance Minister Schaeuble said that the lower house

Bundestag may decide to Cyprus next week. The head of the Bundesbank, Weidmann said that inflation remains under control, which was yet

another confirmation that the ECB may decide to further stimulation. We also add that report Destatis showed that the annual inflation rate in Germany was 1.5% in February against 1.7% in January. The result coincided with forecasts and was the lowest since November 2010. In monthly terms, rose by 0.6% in February against a 0.5% decline in January, as expected.

The pound reached its weakest level since June 2010 against the dollar after data showed that industrial production unexpectedly declined.

National Bureau of Statistics of the United Kingdom reported that industrial production in January fell by 1.2% compared to the previous month and by 2.9% compared with the same period last year. Reduction in industrial production was due to stop production at another oil field of the North Sea, which damaged oil and gas production, increasing the risk that the economy enters a recession in the third in five years.

Published data were weaker than the forecast of economists, who had expected an increase of 0.1% compared to the previous month and a decrease of 1.1% compared to the same period last year.

The Canadian dollar traded in a range against its U.S. counterpart on concern that strong employment data, which were presented last week, will not be able to put the economy on a sustainable growth path. Recall that, by the end of February the number of employees in Canada rose by a whopping 50,700 people, which was much higher than most analysts' forecasts of 7.8 thousand Note also that such a rebound more than offset the decline of 21,900 jobs, which was recorded in the yanvare.Krome order to add that, compared to the same period last year, employment in Canada has increased by 336,200, or 1.9%. Note that the main driving force that has helped to significantly increase the number of jobs was the service sector, which accounts for the bulk of the Canadian economy. Note that in this area the number of workers increased by 59,300 jobs.

00:30 Australia Home Loans January -1.5% +0.6% -1.5%

The yen climbed against most major peers as a lack of unity among Japanese lawmakers for the government’s picks to run the Bank of Japan damped expectations for accelerated monetary easing.

Bullish bets on the yen in the options market climbed to a nine-month high after Japan’s largest opposition party said it would vote against BOJ deputy governor nominee Kikuo Iwata, an advocate of quantitative easing since the 1990s.  The Democratic Party of Japan yesterday said it opposed Iwata because he advocates changing the central bank law to give the government more control in setting policy.

Demand for the dollar was supported before U.S. data today that may show retail sales rose for a fourth month. The Commerce Department will probably say today that U.S. retail sales increased 0.5 percent in February from a month earlier when it rose 0.1 percent, according to a Bloomberg News survey of economists. The American unemployment rate dropped in February to the lowest since December 2008, government data showed last week.

New Zealand’s dollar dropped against all its major peers on speculation the nation’s worsening drought will weigh on the economy, backing the case for the central bank to keep interest rates at a record low. The so-called kiwi touched its weakest level in six weeks against Australia’s dollar after a private report showed consumer confidence in the larger nation rose to a more than two-year high, while official data from New Zealand showed food prices declined last month. The Reserve Bank of New Zealand will hold a meeting on monetary policy tomorrow.

EUR / USD: during the Asian session, the pair rose to $ 1.3040.

GBP / USD: during the Asian session, the pair climbed to $ 1.4950.

USD / JPY: during the Asian session the pair fell to Y95.60.

(pare/closed(00:00 GMT +02:00)/change, %)

EUR/USD $1,3027 -0,14%

GBP/USD $1,4897 -0,13%

USD/CHF Chf0,9471 +0,04%

USD/JPY Y95,98 -0,35%

EUR/JPY Y125,04 -0,51%

GBP/JPY Y142,98 -0,47%

AUD/USD $1,0320 +0,46%

NZD/USD $0,8256 -0,13%