A report in the FT says UK economy faces a year as tough as 2009

Pound:
Despite a decline versus the Yen and a small drop from December's high against the single currency, sterling gained 0.6 percent in the past month against the other nine developed-nation currencies gauged by Bloomberg Correlation-Weighted Indexes, outperforming the euro, the Swiss franc, the Norwegian krone and the Swedish krona. The pound has kept up pressure versus the euro as we continue to trade close to the 1.20 handle, with the single currency looking to remain under pressure as we start 2012. There has even been some strength seen in cable's value as GBP/USD rallies by over half a cent this morning on the back of a gain in risk appetite after better than expected Chinese economic data. Cable was trading close the $1.55 handle but the return of risk appetite saw the currency pair move over the $1.5560 mark.
Data 09.30: Manufacturing PMI 47.4 from 47.6.

Euro:
The euro slipped to an 11-year low against the yen, before paring declines, on concern that the European debt crisis will hamper economic growth and destabilize financial markets as 2012 begins. The single currency weakened against the dollar as a report confirmed European manufacturing shrank for a fifth straight month in December. German Chancellor Angela Merkel said in a New Year’s speech she expects turbulence this year and will do “everything” to save the euro and end the region’s debt crisis. The euro fell to as low as 98.66 yen, the least since December 2000, before trading 0.3 percent lower at 99.40 yen at 4:26 p.m. London time. It weakened 0.3 percent to $1.2924. The euro posted its first back-to-back annual declines against the dollar in a decade last year. It was also the worst performer among 10 developed-nation currencies in 2011, sliding 2.1 percent, according to Bloomberg Correlation-Weighted Indexes.
Data 08.55: German Unemployment Change -9k from -20k.

Dollar:
The dollar fell against 15 of its 16 most-traded counterparts as signs that manufacturing is expanding in the world's two largest economies weighed on demand for haven assets. The greenback weakened for a fourth day against New Zealands dollar before data forecast to show U.S. manufacturing grew at the fastest pace in six months after reports released this month showed gains in gauges for China and India. The risk is obviously that you start to see the US dollar come under a little bit of pressure. The dollar fell 0.4 percent to $1.2986 per euro as of 6:50 a.m. in London from yesterday. It declined 0.7 percent to 78.42 cents against the New Zealand and 0.6 percent to $1.0293 against Australia's currency. The greenback fetched 76.77 yen from 76.90 yesterday.
Data 15.00: ISM Manufacturing PMI 53.3 from 52.7.

General:
•    The Australian and New Zealand dollars extended gains after a report showed China's non- manufacturing purchasing manager's index for December rose to 56 from 49.7 the previous month. Australia's currency strengthened to $1.0288 as of 12:14 p.m. in Sydney from $1.0265 before the data and $1.0234 yesterday. New Zealand’s currency advanced to 78.22 U.S. cents from 78.03 before the report and 77.84 cents yesterday.
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