Focus will continue to be placed on developments in the European debt crisis as well as geopolitical tensions in the Middle East and North Africa. Assuming the status quo in the escalating violence spreading throughout Libya, then investors will watch a Portuguese debt auction with keen interest. If the auction is met with good demand and if there are statements released by EU officials over the upcoming “comprehensive package”, aimed at ending the debt crisis once and for all, then the euro’s downside will look limited. On the other hand, a failed auction, disappointment over the criteria of banking stress tests and caution going into this weekend’s EU summit will also limit the euro’s upside. Swiss inflation data comes on the heels of unemployment figures released, showing a tighter labour market.

Sterling

Sterling trade could see limited volume in front of the Bank of England’s discussion on monetary policy. The central bank is widely expected to leave interest rates on hold at a record low 0.5 per cent, but the debate within the committee will be lively.

US dollar

The dollar rose to one-week highs against sterling and two-week highs against the Swiss franc. The dollar’s gains come on the back of a fall in oil prices. Crude prices fell as Opec and Nato groups looked set to take action. Opec has been in discussions to increase production, while Nato troops continue to consider a no-fly zone over Libya.

Euro

A rise in German industrial orders beat forecast and markets will look to the release of German industrial output. The figures will be looked at for confirmation that the German economic recovery remains on track and will not be too intimidated by a rate increase, which is now expected by the European Central Bank in April. While the data creates short-term movements in the euro, investors refocused on the European debt crisis had taken the euro off four-month highs reached against the US dollar.

Japanese yen

The Japanese yen has held steady after key machinery orders rose above forecast coming in at 5.9 per cent year on year. The data is used as a gauge for business expenditure. The monthly gain was the second consecutive rise and supports the view that the economy is emerging from an economic downturn.

Travelex Global Business Payments Malta, freephone: 800 733 22, www.travelex.com/mt/

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