The key data release was the US trade deficit. This was the third consecutive reduction in America's deficit, defying market expectations of a modest swelling for the month. The US dollar was able to recover recent losses against the euro and sterling.

GBP
The pound lost ground against the greenback. The currency dipped when consumer confidence and the trade deficit both came out weaker than expected. Many individual retail chains reported very sharp increases in spending while the BRC reported acceleration in prices.

USD
The dollar gained across the board after US trade deficit unexpectedly narrowed to the smallest level since July 2005. The market has cut expectations on a Fed rate cut as early as March.

EUR
With no data released from the eurozone, the ECB is widely seen holding rates steady at 3.5 per cent at its policy meeting, but many are looking for another rate increase in the first quarter and possibly as soon as next month.

JPY
The BoJ chief economist said that consumer spending has picked up and will continue to increase in the longer term. It is expected that the BoJ will raise rates in next week's policy meeting.