Sterling had a steady day as most of the news was generated elsewhere. The main news was in Europe with the EU summit meeting in Brussels. At one stage sterling hit a one month low against the euro hitting resistance at €1.19/£1. Although risk aversion was heightened there was little significant movement either against the US$ or the commodity backed currencies. Call in now for the latest update and the latest news.

The EU Economic Summit seemed to be a success with progress being made on fiscal unity and stricter budget disciplines. The only country to join the UK on the sidelines was the Czech Republic. One significant step forward was the agreement of a €500 billion European Stability Mechanism which is to come into force in July this year. This is much earlier than expected. The major short term problem for the euro is the on-going talks about Greek debt. Still very slow progress is being made. Default day is the 20th March 2012. Hopefully it will all be resolved well before that. The market view seems to be that any short term strength in the euro will be short lived. Call in now for the latest update and the latest news.

In the US we had the release of personal income and expenditure figures for December. These highlighted the fall in real spending by the US population towards the end of the year and show that although the US economy is moving forward it still has a long way to go. Markets were also subdued as we wait for a raft of further economic data during the course of this week both in the US [non-farm payrolls employment report] and elsewhere [Chinese manufacturing figures].

Elsewhere the Japanese yen gained ground on increased risk aversion. The belief though is that the Japanese government will try and devalue the Yen in the short term to fuel an export led recovery. Call in now for a live exchange rate.

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