China stole headlines today with discouraging news that rocked the markets in Asia to their core. Numerous reputable publications began flooding the news-wire this morning with rumors that the Chinese have been secretly tightening their fiscal policies by requiring many of their major banks to increase their capital margin ratios and freeze pending loans for at least a month, effectively siphoning off billions of Yuan from the market. Moreover, to add to the selling pressure in Asia, Japan's sovereign debt rating was lowered a notch by S&P due to concern for fiscal inflexibility on the part of the BoJ. As a result, all Asian markets took severe beatings today with Japan's Nikkei knocked down 1.78%.

In another major disappointment to the markets, UK Preliminary Q4 GDP data (actual 0.1% vs. forecast 0.4%) came in significantly weaker-than-expected causing the GBP to plummet. Going in to tomorrow, GoForex traders should watch headlines out of the Fed tomorrow to gage the near term direction of the USD.