Yesterday's European trading session was just as quiet as the New York trading session. With the U.S. out on holiday, the major currencies were caught in tight trading ranges as major players in the FX market were away from their desks. Today's trading will prove to be more volatile with the institutional desks returning to full staff.

The major event traders are eying for this week is Thursday's European Central Bank (ECB) interest rate announcement. Most economists expect the ECB to hold rates steady at 1.00% but are looking for upbeat comments from ECB President Jean-Claude Trichet concerning the management of the European debt crisis along with future direction of EU monetary policy.

The ECB continues to purchase EU government bonds, particularly those of Greece that are the most illiquid securities. The purchases of the government debentures are slowly increasing the money supply in the euro zone. This is raising further concerns over the euro's long term valuation versus the dollar and the pound.