Risk appetite took a significant hit yesterday, as German IFO and US consumer confidence failed to impress the markets and concerns over Greece's impending 24 hour strike weigh on sentiment. US equity closed down and today Asian and European markets followed. This was in spite of the positive economic data from Japan, that looked encouraging, as Jan trade surplus Y85.2 bln vs. Y108.5 bln deficit expected. Exports to China surged +79.9%, to the rest of Asia +68.1%, the third largest exports growth on record. However, today's EU Industrial New Order rose 0.8% vs. -1.0% exp, giving a slight boost to the EURUSD. Interestingly, while there has been a pause, there are new reasons be EU negative (Fitch's Greek bank downgrades has faded) and therefore sell the EUR, there is a growing paranoia around the UK finances. And yesterday, BoE Governor King dovish comments highlighted that the UK economy is still fragile and that risks to the outlook remain lodged to the downside, which just added to the growing concern. Today's highlight will be Fed Chairman Bernanke semi-annual testimony (Q&A portion) before the House Panel. We believe he will stick the Jan FOMC minutes and sound cautiously optimistic on inflation and growth. In addition, his testimony will focus on the exit strategy through reiteration of comments he made back on Feb 10th. In our mind, the big risk will be any shift in language minimizes the sense that economic conditions warrant Fed Fund rates to stay ultra accommodating during an extended period of time. A move that would be bullish for the USD, especially considering recent economic data. Otherwise, the light calendar day will have markets clinging to any stories, especially ones involving sovereign credit worries. In the near term, we believe the USD should profit from improving economic data, discussions of exit strategy and increasing probability of eventual normalization of monetary policy. In addition the greenback should continue to benefit from sovereign risk worries in the EU and UK.