Overall: The currency market moved relatively strong during the Asian session, but lost some of the steam shortly after the London open. The majors traded mixed during the overnight session, influenced by the negative European equity markets. The euro, pound and aussie rose heading into N.Y. as S&P futures gained, but stocks traded without clear direction and the majors mostly stayed in a range bound by Tuesday's high and low.

The Euro (Eur/Usd) rose initially during the Asian session, but then the pair was sold at a strong pace. The pair began an ascent about an hour after DAX futures began, rising until Wall Street opened, but traded in a range bound by Tuesday's high.

In January, the German PPI was released at -1.2%, much higher than the market’s expectations. However, the year-over-year read has fallen to 2.0%. The largest upward pressure came from energy products in the prior months, but now this trend seems to be reversing, dragging the whole index lower.

The Pound (Gbp/Usd) traded between the neutral pivot point (1.3790) and TheLFB S1 (1.3670) during the Asian and European sessions, unable to move decisively in either direction. A similar thing happened in the last day of trading, when the pound moved sideways during the overnight session. As with the euro, the pair rose heading into N.Y. It declined to mid-day, and then began to appreciate towards session highs on 1.3840.

The U.K. deficit widened again in January, to £7.7 billion, more than market expected. The previous number was revised higher from a deficit of £7.4 billion to £7.2 billion. The UK's deficit on trade in goods and services was £3.6 billion in January, compared with the deficit of £3.2 billion in December 2008. The surplus on trade in services was £4.2 billion, compared with a surplus of £4.0 billion in December

The National Institute for Economic and Social Research (NIESR) has stated that the U.K. economy contracted 1.8 percent in the three months to February. This follows output falling by 1.7 percent in the three months to January. The NIESR concludes that additional bank credit may make it easier for companies and businesses to cycle through their stock which will slow the rate of contraction.

The Aussie (Aud/Usd) also rose after DAX futures began and continued until Wall Street opened. From there, the pair spent the N.Y. session in a slow decline as stocks wavered between gains and losses.

Home loans in Australia came in at 3.5 percent which is slightly lower than analysts’ forecasts of a 4.0 percent read. In seasonally adjusted terms, dwelling finance commitments increased 0.7 percent while owner occupied and investment housing grew at 2.3 percent and 3.8 percent respectively. The consumer sentiment indicator for Australia came in at -0.2 percent from last month’s -4.6 percent reading. The sentiment index came in at 85.6 points in March and this is the fourteenth month that the index has held below 100

The Cad (Usd/Cad) traded in a tight range, above the neutral pivot point (1.2845), during the European session, 40 pips higher from where the cad started the day. This month, the cad has traded in a 300 pip range, near the highest value seen in four years. The pair rose in N.Y. as crude declined on the day after the weekly inventory report showed that stockpiles built more than expected.

The Swissy (Usd/Chf) continues to be hemmed in by the 20 and 100 day simple moving averages, which are acting as resistance and support respectively. The pair showed signs of strengthening during the Asian session but resumed moving sideways during the European trading hours. The pair declined heading into N.Y. but rose after Wall Street opened, finishing the session near the lows established at 09:30 EDT.

The Yen (Usd/Yen) struggled during the overnight session to break under the 98.30 level but despite the numerous attempts, has so far failed to do so. Tonight is the second consecutive day that the yen has declined, as the pair approached the 200-day simple moving average. The pair fell sharply in N.Y. as stocks wavered between gains and losses, falling about 100 pips to a low of 97.03.

Machinery orders for Japan fell by 3.2 percent in January which is much better than the 4.9 percent fall that analysts had been expecting. This is fourth continuous month in which machine orders fell. Domestic corporate goods prices came in lower than expected with a reading of -1.1 percent as wholesale prices fell at a faster pace during February as the global recession slashed the cost of energy and other commodities.