Overview
The market took the opportunity to catch its breath from the recent USD surge. Lack of data releases left most major crosses trading in tight ranges, ahead of the more significant data releases expected towards the end of the week.

GBP
Nationwide have released a report stating they expect there to be a surprisingly upbeat figure when the retail sales are announced next week. Sterling's weak footing will be mulled further, ahead of the manufacturing and industrial production figures release. This should raise the odds of a March rate hike.

USD
The dollar was relatively stable against the major currencies with the exception of the Japanese yen, where it weakened quite significantly. This has been attributed to the pricing in of a possible change in the BOJ Interest policy which may start to narrow the gap between US and Japan's borrowing levels.

EUR
The euro was weighed down by German industrial production, coming in at 0.5 per cent below the +0.7 per cent consensus. It however remained little changed against the dollar and ended the day slightly stronger against the sterling.

JPY
The Japanese yen was the big mover in the currency markets. Japan's bank lending stopped falling for the first time in eight years, showing that the deflation that's been plaguing the world's second-largest economy may be coming to an end.