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Sterling under pressure

Also released was the UK which widened to -7.8 billion from the previous -7.5 billion. These figures however are from October before the recent rate cuts so were not a great surprise to the market.

Risk aversion has seen the Yen strengthen once more across the board and there was heavy trading in Euro/ Yen and Dollar/Yen in the Far East overnight.

The Dollar performed better after their Homes sales figures were released as they didn't drop as much as market predictions have forecast. The Euro traded to and fro, during the course of the day after initially being buoyed by a better than expected ZEW survey from Germany. The market had predicted that this was due to show the worse ever figure since records began.

The Canadian Dollar was quite volatile as well yesterday after the BOC lowered its rates by 0.75%. It lost ground on the announcement but retrieved most of its losses by the end of the day.

So far this morning we have German wholesale prices come in pretty much as expected and with a lack of data in Europe today the main focus could swing to the dollar. The US have mortgage figures due at noon UK time followed by wholesale and crude oil inventories due at around 3pm our time. The most interesting data though from the US is probably Fed budget announcement this evening when predictions are for the deficit to show it coming in around -172.5 versus the previous -98.24.