Budget day for Britain today

US Dollar:
The U.S Dollar pulled back from a 3-week high against the EUR yesterday pressured by an im-provement in risk appetite following gains in U.S. stocks. U.S. stocks rose on Monday as the passage of a bill overhauling healthcare ended uncertainty about the reform. However, traders said the rebound will be short-lived because of the failure in a quick resolution over Greece during this week's summit. A Greek fiscal crisis has helped make investors more cautious of risky assets in recent weeks, boosting the greenback against the EUR. The Dollar also turned lower against the British pound and Japanese yen, pushing down an index of the greenback's performance against a basket of currencies. The USD fell 0.5% to buy 90.11 yen, and 0.4% against the GBP to $1.5066. The currency market will look ahead this week to U.S. economic data releases including reports out today and a testimony by Federal Reserve Board Chairman Ben Bernanke on Thursday.
DATA: Core Durable Goods orders, New Homes Sales



Pound:
Budget Day is the day Britain's chancellor of the exchequer is traditionally allowed to enjoy a tipple as he delivers the government's fiscal plans to the House of Commons. But with an election expected in only six weeks, Alistair Darling's budget speech today may leave sterling traders reaching for a glass of sherry with beaten egg — the tonic preferred by Victorian eminence William Gladstone during his tenure as chancellor. Budget Day hasn't tended to offer major fireworks for currency markets. The budget delivered by Darling last year, however, was bleak enough to send the pound skidding by nearly 2 cents versus the dollar on the day. This time around the stakes are even higher. Darling's boss, Prime Minister Gordon Brown, is widely expected to call an election for May 6 (an election must take place no later than early June). Darling indicated over the weekend, however, that a slightly better fiscal position would be used to trim deficits in the coming year and beyond, rather than to finance new spending initiatives or tax breaks. The pound took a drubbing on Friday as a rebound into the low $1.50s failed to find follow-through momentum. Sterling fought back to trade above the $1.50 level Monday afternoon, but charts still point to further weakness ahead, with longer term support seen around the $1.40 level.
DATA: Annual Budget Release

Euro:
The euro fell to a record low against the Swiss franc after French and German leaders said any aid package for Greece would require help from the international Monetary Fund, undermining confidence in the European union. The 16-nation euro dropped to a 10 month low versus the dollar as uncertainty about the bail¬out of Greece damped demand for European assets. The franc rose for a ninth day versus the euro, it’s longest winning streak since 2002, on speculation Switzerland’s central bank will allow the currency to gain.
DATA: German Ifo Business Climate

General:
• Crude oil futures fell in Asia overnight, inversely tracking a strengthening greenback, which discouraged investors from buying commodities, such as oil, that are priced in U.S. dollars.

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GBP/USD	1.4983
GBP/EUR	1.1158
EUR/USD	1.3426
GBP/JPY	135.78
GBP/AUD	1.6342
GBP/NZD	2.1270
GBP/ZAR	11.0239
GBP/CHF	1.5919
GBP/CAD	1.5238
GBP/SGD	2.1024
GBP/THB	48.16
GBP/HKD	11.634 red-down; blue-up (snap shot)