GBP gives back some of it EUR gains.

US Dollar:

Despite decent technical corrections aganist both the GBP and EUR, the USD still looks to be in the driving seat. EURUSD has seen a 4 cent rally from 1.33, almost breaking 1.37 yesterday morning but has since softened down to 1.3610, a move driven by events in the EuroZone (see below). Cable has followed a similar path to the high 1.54’s but stopping short of 1.55 break. Data out from the US is proving to be resilient with recent employment data being the strongest in 3 years. Tuesday’s US Trade Balance numbers could spark some short-term volatility across US Dollar pairs, but we may have to wait until Wednesday’s combination of Consumer Price Index, Retail Sales and testimony by Bernanke for further direction. Bernanke's speech is ex¬pected to have a relatively sombre tone as the FED does not want to stoke rumours of monetary tightening any time soon but the fact can not be ignored that sooner rather than later the FED will need to act to control infla¬tion and the Dollar could resume its upwards trajectory with a vengeance.
DATA—Trade Balance (FEB) Fed’s Tarullo Speaks. API Oil/Gasoline Inventories (FEB)

Pound:

Sterling has suffered at the hands of the other majors yesterday as the Euro fought back to recover from a terrible last week and the USD managed to find short term resistance. GBPEUR traded just shy of 1.15 on Friday but this morning has breached underneath 1.13 for a break into the 1.12’s. Cable had been making good head way but traders stopped short of 1.55 at 1.5486 and we are now trading the 1.5350’s. Both the 1.55 and 1.15 levels have been touted as being key technical levels in the market so we are not surprised to see the pound bounce here. On the economic front, a serious of negative news certainly hasn't helped the pound, in¬cluding a fall in the number of housing surveyors reporting growth and a report by fund manager Pimco that the spot light is still firmly on the UK’s sovereign debt problem, sighting the unwinding of the BOE’s quantitative easy and other extra ordinary liquidity measures as the real test for the UK economy. The usual, election hung parliament jitters are still doing the rounds but thankfully this situation will come to a head on the 6th of May. We have a feeling that some of the other structural problems for the Pound could be around for a lot longer.
DATA— GBP Visible Trade balance (FEB) DCLG House prices YoY (FEB)

Euro:

The euro is edging lower on Tuesday, as doubts about the endurance the current rescue plan surface. While the agreement removes the immediate prospect of Greece's sovereign default, the underlying structural issues, which have driven the euro down over the last few months, are still in place. Analysts now doubt that the euro will manage to rally much more in the very near term. Not only are there residual concerns about Greece's financing ability, the bailout has done nothing to resolve the difficulties of other peripheral debtors, such as Por¬tugal and Spain, in the euro zone. The euro will drop to $1.325 by the end of June, according to the median forecast of 32 strategists at banks and foreign exchange houses polled by Dow Jones Newswires. By the end of the year, the euro will trade at $1.2775 and slip further to $1.25 by March 31, 2011, according to the survey's median. Should this prediction prove to be true, we see GBP/EUR in the 1.20 area by 2011 or before providing the UK can get a handle on its budget deficit.
DATA— GER CPI MoM/YoY (FEB), FRA CPI MoM/YoY (FEB), EuroZone CPI MoM/YoY (FEB)

General:

UK election news—Four new polls tonight. Looking at the broader picture there does seem to have been a slight trend back towards Labour from the higher scores we saw last week. Labour are creeping up-wards, possibly at the expense of the minor parties

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GBP/USD	1.5348
GBP/EUR	1.1285
EUR/USD	1.3595
GBP/JPY	143.20
GBP/AUD	1.6567
GBP/NZD	2.1497
GBP/ZAR	11.1886
GBP/CHF	1.6240
GBP/CAD	1.5410
GBP/SGD	2.1374
GBP/THB	49.33
GBP/HKD	11.9120 red-down; blue-up (snap shot)