Euro is trading lower

The euro is trading lower across the board Thursday with early Europe continuing the selling triggered in Asia by French finance minister Lagarde's comments that ECB's Trichet may change his mind on rates after this weekend's G8 meeting. EUR/USD is now 150 ticks off the day's high at a 1 week low of 1.5393. EUR/GBP trades at a 1 week low of 0.7885 while EUR/JPY is 100 sen off the day's highs at 165.65

The US may well find it gets little support for intervention to help the USD. Countries such as those in the euro zone won't want to jeopardize their own inflation by pushing the USD higher. And the US economy is probably too weak to withstand the hike in US rates that would be make coordinated intervention more likely.

Last night's Fed's Beige Book release was somewhat at odds with recent hawkish Fed commentary. It did note higher input prices were feeding through the system, however the overall tone was far softer, says Simon Penn, analyst at UBS London. Consumer spending has slowed, economic activity was generally weak, credit standards are still tightening, residential real estate markets were weak across most districts and manufacturing activity was soft.