Weakened investor sentiment comes after a meeting of EU Finance Ministers failed to come up with concrete measures to solve the debt crisis. Alternatively, an emergency Cabinet meeting was held in Greece to find more ways in which to cut government spending and prove that the country is serious about meeting its deficit targets for this and next year.

The emergency meeting came as Angela Merkel’s coalition government in Germany suffered losses in regional elections. Combined, the two events are weighing on sentiment and helping to lift the US dollar on increased safe haven flows.

Sterling

The main focus in the UK is on the Bank of England’s minutes. Investors will want to see just how close the central bank was to increasing its quantitative easing program at its meeting earlier this month. There is wide speculation that the most dovish member on the committee, Posen, saw two other MPC members joining him in his calls for more quantitative easing. The closer the country comes to more quantitative easing the more sterling could come under selling pressure.

US dollar

The US dollar looks ready to crawl back to its highs. A small rise in consumer sentiment coupled with strong TICs data will also help provide some upside to the dollar. Data from the Treasury showed that there continues to be strong demand for US debt.

Euro

The euro is back in focus after the EU Finance Ministers meeting in Poland failed to come up with any new news. US Treasury’s Timothy Geithner came and while his being there was historic, he told other FinMins little that they did not already know and there was even some who felt he should put his own house in order before turning his attention to Europe. In the meantime, Germany’s leadership suffered a blow and the Greek government strained to come up with more austerity measures.

Japanese yen

The yen, continues to see modest gains on rising safe haven purchases.

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