The Euro dropped from the 1.37 mark reaching the 1.35 mark. The main news this week is going to be on the expected interest rate cut from the ECB expected at 50 basis point cut.
The press conference on Thursday could be very interesting if the ECB decided not to cut interest rates with accusations of inaction in the current financial climate. The financial data activity for Eurozone is expected to be very poor and show further weakness in Europe.
In the US, the trade deficit was down from $57.2bn to $52bn. Exports were down along with retail sales, which came down by 1.2% in December which gave a year on year decline from 5.3% to 5.4%.
Despite the interest rate cut last week by the BoE of 0.50%, credit conditions have tightened as lenders are not passing the cut onto their borrowers. Mortgage lending was down to 27,000, the lowest since 1986. However chartered surveyors have seen an increase in enquiries but have said that prospects fall through once banks decline lending. The Trade Deficit was down from £3.9bn to £3.7bn, exports figures also showed a decline due to the collapse in world trade.