Yesterday's dollar gains against the euro and Swissy have been trimmed. The greenback lost 1.3% against the Swiss franc, 0.8% against the euro, 0.5% relative to the yen and 0.2% against the Canadian dollar. The buck is unchanged against sterling and up 0.4% and 0.3% against the Australian and New Zealand dollars.

Asian stocks are higher on balance, including gains of 1.7% in Japan, 2.7% in Pakistan, 2.8% in South Korea and 2.7% in Pakistan. However, India's market was rocked by a corporate governance scandal involving Satyam and plunged 7.3%. Stocks also fell 3.4% in Hong Kong, 2.2% in Thailand and 1.6% in Indonesia.

Australian share prices advanced 1.0%, but European stock markets are lower: German Dax -0.8% and British Ftse -1.4%.

Oil prices are modestly lower but holding above $48 and thus near $50. Russian natural gas shipments to Europe through the Ukraine have been halted.

Gold is steady at $865.5 per barrel. The 10-year JGB yield is steady at 1.255% ahead of tomorrow's auction. Sovereign bond yields are higher in continental Europe. Euribor rates edged down further.

Taiwan reported on-year drops of 42.1% in December exports and 44.6% in imports. These results were much weaker than expected and elicited an immediate and unscheduled 50-basis point benchmark interest rate cut by the Central Bank of Taiwan to 1.5%. The previous reduction was made December 12th.

Bank Indonesia also reduced its key rate, lowering such twice as much as expected to 8.75% from 9.25%.

The Bank of England is likely to cut rates more than 50 basis points tomorrow, and the Bank of Korea will reduce its key rate on Friday.

Australian December retail sales unexpectedly rose for the fourth time in five months, clocking a gain of 0.4% after an upwardly revised 1.0% advance in October. Lower energy costs and interest rates have fortified private consumption more clearly in Australia than elsewhere.

Producer prices in Euroland fell for a fourth straight time, plunging 1.9% in November and cutting the 12-month rate of increase to 3.3% from 6.3% in October and 9.2% in July. Energy prices fell 5.1%, while non-energy producer prices dropped 0.8%. The 12-month gain in non-durable consumer goods slowed to 1.9% from 4.8% at mid-2008. The PPI in October-November was 2.1% lower than the 3Q level.

German unemployment rose 18 thousand in December, the first increase in 34 months and about twice as much as forecast, but the jobless rate stayed at an upwardly revised 7.6%. Employment rose 1.2% in the year to November, down from 1.3% in October, 1.4% in 3Q, 1.5% in 2Q and 1.7% in 1Q08. A trend reversal in Germany's labor market has now occurred.

According to the British Retail Consortium, shop prices posted a 12-month rise of only 0.5% in December, sharply below November's 2.7%.

A Chinese official said scope remains for easier monetary policy.

France's finance minister said inflation will drop further and mitigate downward pressure on consumption.

Norwegian credit to households slowed to a 12-month pace of rise of 7.5% in November from 8.2% in October. Total credit growth dropped a full percentage point to +10.9%. Norway's jobless rate edged higher to 2.7% in September-November.

New Zealand's trade deficit dropped to NZ$ 520 million in November from NZ$ 996 million in October.

The U.S. ADP private employment report is due at 13:15 GMT.