There appeared to be a change in sentiment regarding the US dollar last week with repatriation drying up and technical levels being broke on many dollar currency pairings. The FOMC meet this week for the last time this year and rates could well fall to 0.5% in the US from the current 1%. Today they have the release of their Industrial Production number expected to show a fall of 0.8%.
The main beneficiaries of the dollar weakness have been the Japanese Yen and the Euro. In fact the Yen has been the best major performing currency through the world credit crunch and has been many traders hedge as risk aversion.
The Eurozone has some fairly significant numbers due this week with the German IFO survey being released on Thursday probably attracting the most attention. Today we have Mr. Trichet speaking again on Monday with dealers hanging onto his very carefully chosen comments on future growth in the Eurozone.
In the UK we have our CPI numbers due on Tuesday, the minutes for the last BOE meeting expected to show a 9-0 vote for the 1% rate cut on Wednesday and Retail sales figures due on Thursday once again are expected to show a lower reading.