This week, concentration will be on the FOMC policy statement to give some direction for the markets in the run-up to Christmas. In the US, retail sales and CPI figure releases will be key. The UK awaits the release of inflation, retails sales, unemployment and the CBI Industrial trends survey.

GBP
The sterling is lower against the broadly firmer dollar but recovered against the euro from previous weeks' lows. The headline CPI is forecast to rise to 2.6 per cent, which will also add to talks of a rate hike in early 2007.

USD
The dollar started the week on a firmer tone, rebounding over the weekend against all major currencies. The Fed is expected to leave interest rates on hold at 5.25 per cent. US data releases over the week will be important for the dollar.

EUR
The euro gained against the sterling after the ECB raised interest rates, while the BOE kept theirs on hold, narrowing the interest rate advantage sterling had over the euro. The German ZEW index is due for release and is expected to fall modestly.

JPY
The yen slipped against the dollar on growing doubts as to whether or not the BoJ will raise interest rates at its December meeting.

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