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Euro a big performer once again

Grossly underestimated US unemployment stats, combined with another display of hawkish conservativism from Trichet, meant that the resurgent Euro was the big news at close of play on Friday.

The greenback's woes have been compounded by a bullish Euro, but the effect on the Sterling was not quite as significant, as the increase in Cable was mitigated by more grim housing market data from the UK. The majority of analysts are now predicting a slump; some envisage a fall in house prices of up to 30% in the coming two years. With inflationary pressure keeping Mervyn King's hands tied, the Sterling has not been able to fully capitalise on the Dollar's recent weakening.

The Euro is once again the big performer, powering through the alarmingly low stats on German industrial production and more grim news on France's trade deficit. Trichet seems content to maintain his current stance, but as German industrialists foretell a decline in manufacturing output from the EU's chief breadwinner, this climate could change all too easily.

Looking ahead, today sees two members of the Federal Reserve, Geithner and Rosengren, making speeches on the US economy at two separate functions later today, but any resultant impact on the Dollar will most likely be minimal and will fall by the wayside completely if the price of crude continues to climb. Bernanke is speaking at just after midnight GMT; his words will be analysed carefully, but might not have the same positive impact for the greenback that they did previously.

Here in the UK, the Sterling could receive a boost if PPI stats come out as high as expected; high production prices could be of great importance in the coming weeks, and will hopefully act as a counterweight to the seemingly inevitable housing market downturn.

Elsewhere, the Canadian Dollar could see some mild gains today off the back of high crude prices, as well as positive predicted housing stats.