:: United States Dollar: The pound rallied against the US dollar yesterday reaching a high of 1.4805. It remains firm this morning and opens up at 1.4730, supported by positive local house price data, released overnight and moreover positive risk sentiment as equity and commodity prices stay strong. Also supporting the pound this morning is news that Tesco, the world's third largest retailer sees the global economic recovery as underway and that they expect growth in the British market to pick up. The rise in GBP/USD comes despite the newly formed Office for Budget Responsibility downgrading the UKs economic growth forecasts yesterday. It did however predict that the UKs deficit will fall to 10.5% of GDP in 2010/11 down from earlier projections of 11.1%. It is an important day today data wise as markets await the release of UK CPI inflation, and an inflation report hearing from the BoE and consumer confidence data. US Empire State Manufacturing Index is also released later today.

- We expect a range today in the GBP/USD rate of 1.4690 to 1.4860

:: Euro: EUR/USD continued to push higher yesterday up through the 1.2200 figure but falling just short of 1.2300. It has been knocked lower again this morning though. Weighing heavy is Moodys decision yesterday to downgrade Greek debt to junk status. This has in turn put some downward pressure on European stocks this morning. Also not helping is Citibanks plan to take the Greek debt off of the world government bond index and some dovish words from an Australian reserve bank official who is worried that Europes deficit problems wont be solved anytime quickly. EUR/USD is back down under 1.2200 and opens this morning at 1.2190. GBP/EUR in the meantime trades a fairly tight range between 1.2020 and 1.2100. It now threatens a break of 1.2100 again and sits at 1.2097 this morning.

- We expect a range today in the GBP/EUR rate of 1.2000 to 1.2140

:: Aussie and Kiwi Dollars: AUD/USD has slipped from its high of .8660 yesterday following the release of Reserve Bank minutes. It indicated that it will keep interest rates on hold next month despite remaining positive for the medium term outlook for the Australian economy. It opens up this morning at .8540. NZD/USD has also fallen from highs yesterday of .7020. Overall though the kiwi remains strong as commodity prices and global risk demand support the local unit. GBP/AUD and GBP/NZD have both bounced around as the commodity linked currencies remain ultra sensitive to risk. They are both up this morning and trade at 1.7270 and 2.1320 respectively.

- We expect a range today in the GBP/AUD rate of 1.7200 to 1.7360

- We expect a range today in the GBP/NZD rate of 2.1240 to 2.1400

:: Data Releases:

• AUD: No data due for release today
• EUR: German ZEW
• GBP: CPI, Inflation Report Hearings, Nationwide Consumer Confidence
• NZD: No data due for release today
• USD: Empire State Manufacturing Index, TIC Flows