Forexbegin.Net

Today was certainly not the exciting day that most envisioned due to the heavy hitting line up of top tier data from down under as well as China.

The British pound fell against the greenback and euro on Wednesday and analysts expect further declines for the currency given the gloomy economic outlook for Britain and worries on the political front.

Following Australian labour market and Chinese industrial output and CPI data released overnight, markets will today focus on another round of trade statistics following Tuesday's disappointing UK numbers.

***Economic Data***

(US) MBA Mortgage Applications w/e Mar 5th: 0.5% v 14.6% prior

(IC) Iceland Feb Unemployment Rate: 9.3% v 9.0% prior

The dollar rose versus the Japanese yen and British pound on Wednesday, but the euro managed to erase an earlier loss versus the greenback after stronger-than-expected manufacturing data from France and Italy.

Former Italian Prime Minister and no stranger to yawning fiscal deficits, Romano Prodi said earlier today that the Greek crisis is over. Having weathered the storm and with less time pressing their own fiscal agenda, the former President of the European Commission said that other lesser indebted Eurozone nations will be spared the Greek-style drama. Signor Prodi sees no reason for other Eurozone members to falter from this point.

Forex trade has been really slow this week, with the majors pairs failing at the first support or resistance that came their way. The only exception is the pound, which has moved approximately 300 pips this week.

The JPY was weaker again into the late European session as US treasury futures sold off again and after another low inflation figure (the PPI this time) suggests that the BoJ will increasingly lean toward rolling out new quantitative easing measures to fight deflation, though the BoJ and MoF aren't necessarily on the same page as to how to go about fighting deflation, judged from the rhetoric that makes it to the press, at least.

Asian markets were relatively flat today after a lackluster performance in US equities. Greek Prime Minister George Papandreou met with President Obama in Washington yesterday to discuss efforts to fight speculation.

Sterling once again stole the limelight this morning. After a weak start (which took it down to USD1.4888) on the back of yesterday's warnings from Moody's on the banking sector, cable found support as PM Brown gave an address on the economy.