It was what have come to know as a typical day on the forex markets; risk appetite rolling back and forth like the tide with individual pieces of data and bank worries floating around like flotsam and jetsam.

FX markets largely shrugged off the higher US CPI figure friday instead focusing on the worries for Citigroup. The ‘mega-bank’ may need an additional injection of cash from the US government but the likelihood of this happening allowed dollar to weaken. Selling pressure was also put on the dollar traders did not want to run positions through this weekend’s pre-G20 summit.

Policies looked at the ‘table-setting’ for President Obama’s first European trip since taking office included regulation of hedge funds, a clamp on tax havens, harsher capital minimums for banks and an end to high LTV mortgages. All good stuff in the grand scheme of things.

It is a very quiet data today and markets will once again be governed by equity market moves.

Further analysis is of course always available at our video blog http://uk.youtube.com/user/WorldFirstJC

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