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It was back to business as usual on Friday, with Sterling again under pressure against the majors, as the recent equity surge driven by the US PPIP plans finally ran out of steam, and the US QE plans look to have been priced into the market.

The US dollar was also helped by news that a senior Japanese official discarded the Chinese driven concept of a global currency, restoring some of the faith lost in its reserve currency status. The official also stated that the upcoming G20 meeting would be focusing on regulatory reform of financial markets and protectionism rather than currency issues. The Yen was also pushed higher as a result of these comments which reiterated Tim Geithner’s tone late last week that the dollar would remain the reserve currency.

Selling pressure was added to the pound after the UK GDP figure for the last quarter was revised downward to -1.6% from the 1.5%. Cable did manage to find some support at the 1.43 level that has proved a strong resistance point, after falling off throughout the day however early morning trading has seen this level breached.

Commodity currencies enjoyed another strong day, lead by the kiwi, after it revealed a massive positive surprise with its trade balance figure of +489M against a consensus of +75M.

Data out today is EU and UK consumer confidence measures. JPY jobless rate figures should also continue to highlight the dire state of the deflating Japanese economy

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