Mr. Bernanke stressed yesterday his commitment into fighting rising inflation and inflation expectations, his Hawkish comments was further supported by one of the Feds' well known Hawks Mr. Fisher, while Mr. Paulson confirmed the new rhetoric which was first presented last week by Mr. Bernanke himself over a preferable strong dollar by stressing that intervention in the currency market was still a valid option!

This provided the dollar with huge upside momentum as it gained heavily against major currencies, a move which is most likely to be welcomed by both the ECB and the BOE, Mr. Trichet stressed his growing concerns also over the outlook for inflation last week by saying the ECB might be forced into hiking rates as soon as next month, while the BOE maintained their borrowing costs steady at 5.00% as rising inflation is preventing the BOE from acting towards a severe slowdown to the economic activity in the U.K.

Germany's wholesales price index came out to confirm those increased inflationary pressures, prices rose in May by 8.1 percent after rising 6.9% the prior month, while median estimates were pointing for a rather moderate rise of 7.1%, while compared with a year earlier prices rose 1.4% much higher than the previous estimate of 0.6% and the expected rise of 0.7%.

Meanwhile the U.K industrial production rose 0.2% back in April after falling 0.5% in March and better than the expected flat reading, while over the year industrial production rose 0.2% inline with the previous estimate but slightly better than the expected 0.1%.

As for the manufacturing production in the U.K, it rose 0.1% in April after falling 0.5% the prior month, while compared with a year earlier manufacturing production rose 0.1% after a reported rise 0.6%.

The rise in production might have been a result of the lower Pound which should support growth through increased exports, though the BOE expect in their worst case scenario that economy might contract, as the ongoing house crisis that emerged in the U.K and lower consumer spending is hurting the economy right now.

Later today the U.S should release their trade balance for April, and even as the dollar continued to depreciate back in April, but seemingly rising raw materials, food, and energy prices diminished the advantage of a falling dollar on exports as according to median estimates the trade deficit is expected to widen!

While the Bank of Canada will announce their interest rate decision, markets expect the BOC to cut their rates by a quarter percentage points to 2.75 percent since the economy started to contract during the first three months of this year, as the Canadian economy was the first victim of a slowing U.S economy and who knows who might follow especially as New Zealand are expected to follow the lead of Canadians!