LONDON (AFX) - The euro slipped back below the 0.8700 usd level in early trade after a strong overnight performance on Wall Street and remains vulnerable to a raft of US data later today, dealers said. "The euro's downtrend is very much intact," said BNP Paribas currency strategist Ian Stannard. His view was echoed by WestLB currency strategist Michael Klawitter, who suggested that euro/dollar "will lastingly breach" the 0.87 usd level to the downside, "which would trigger further stop-losses and therefore accelerate the downward momentum." Data later today in the US is expected to be dollar-supportive and prompt that move down, according to ABN Amro currency strategist Rob Hayward. The initial focus this afternoon in the US will be on the trade report, which will provide guidance for fourth quarter GDP revisions, as it will illustrate how much of the consumer spending rise in December was due to imports. Economists expect the report to prompt an upward revision to GDP. Attention will then shift to the Philly Fed survey, which could provide possible confirmation of stabilisation in the manufacturing sector. Euro zone data flow today, such as Italian Cities CPI for February and French January consumer spending, are unlikely to have much impact, said WestLB's Klawitter. Meanwhile, dollar/yen remained relatively stable but off highs earlier this week as confidence in the Japanese currency is growing. Last night's strong rally by the Nikkei was one of its best performance in around a year. "Dollar/yen is in a corrective phase, which could initially go down to 132 yen," said BNP Paribas' Stannard. "The corrective phase will remain intact as the recovery on the asset markets continues." The latest bout of optimism on the Japanese stock markets has been prompted by hopes that the government will inject public funds into the banking sector. Meanwhile, sterling was little changed by Prime Minister Tony Blair's overnight suggestions that the government will increase taxes to help fund sustained improvements in the National Health Service. "It was interesting from a rates point of view," said ABN Amro's Hayward. "Higher taxes will reduce the prospects of a quick rise in rates." However, BNP Paribas' Stannard noted that the UK is aligning itself more and more with the Europe on political and social issues. "It adds up for sterling to trade more and more like the euro," he said. Official retail sales figures at 9.30 am should provide further evidence of continued buoyancy on the high street. January retail sales are expected to rise by around 0.7 pct on the month.