With the events in Cyprus being the key focus, yesterday we saw the euro tumble after Eurogroup president Jeroen Dijsselbloem declared that the Cyprus rescue plan should be seen as a template for the rest of the euro zone.
In an interview with reporters in Brussels after the Cyprus plan was agreed, Dijsselbloem argued that Europe could now take a new approach to tackling struggling banks.
The negative news from the euro zone caused the pound to strengthen to a six week high against the euro over concern political wrangling over the €10bn bailout of Cyprus has undermined faith in Europe’s financial system.
The pound was also supported as a U.K. industry report showed house prices rose this month.
Elsewhere, the only the notable announcement was Ben Bernanke’s speech at the London School of Economics. He firmly defended the Fed's policies to keep borrowing costs at record low saying the US economy still required the support to help lower high unemployment.
Critics however suggested that the low-interest-rate policies could feed a global currency war. Bernanke argued that the situation is different today because the low interest rate policies have the primary aim of boosting domestic growth and not trying to devalue a nation's currency.
The outlook for today will be data coming from the US, with durable goods expected to increase along with a rise in US consumer confidence.
12.30pm – USD – Durable Goods Orders (Feb): Expected to increase to 3.8%.
14.00pm – USD – Consumer Confidence (Mar): Expected to fall to 68.
14.00pm – USD – New Home Sales (Feb): Expected to fall to 420,000.