The dollar continues to trade among its highest levels for quite a while versus the euro and sterling while the Japanese yen on the other hand is holding around its highest in a decade. Sterling is aiming at limiting its losses after the extensive hemorrhaging it suffered today versus the dollar and the yen.

Sterling declined versus the dollar to record its lowest at 1.6166 and rebounded strongly from that level to set its highest at 1.6353 and the pair continues to trade at its highest recorded today. The trade balance data were actually negative which continued to reflect the weak contribution to the GDP which seemingly persists in contraction into the fourth quarter. Nevertheless, the highlight is still on Darling's pre-budget testimony for the Parliament today which will define the fiscal plans the government has to support the economy on the expense of increased borrowing and a growing public deficit.

The euro also managed to limit its losses versus the dollar rising off its low at 1.4667 and reached 1.4781 and still trading within the upper range set today above 1.4750 which support the pair to reach the coming resistance at 1.4820 as far as trading is above the mentioned support. Yet technically, the pair lacks the needed bullish momentum to continue to the upside increasing the likelihood to the downside as soon as trading resumes below 1.4750.

The decline in Asian equities that trailed the US last night and extended into Europe powered a yen buyback wave, which supported it versus the dollar today to rise to 87.35 taking the pair lower from 88.69, which was also supported by the correction the dollar has started.