Sterling hovered near a 16 month high against the euro on Tuesday as investor concern that the euro zone crisis will deepen saw sentiment fall towards the single currency. Sterling held on to gains against the US dollar despite a risk of sterling falling against the currency on safe haven demand from the US dollar in coming months. Out today there is trade balance data for the UK which could make interesting reading – call in now for a live exchange rate.

In the euro zone, sentiment towards the euro continued its downward spiral after Nicolas Sarkozy and Angela Merkel failed to reach a solution to the euro zone crisis on Monday and concerns grew that Greece is close to default. The more time taken by European officials over the debt crisis, the more that the euro is set to weaken against its counterparts. Out later today there is the final GDP figures for the 4th quarter of 2011 and tomorrow sees the ECB's interest rate meeting, so call in now to ensure that you don't lose out.

In the USA, the US dollar weakened marginally in US trading as market sentiment improved on the back of strong expectations for US corporate earnings and strong data being released from the USA. Data released on Monday showed that consumer credit for November expanded at an annual rate of 10% - the highest for 10 years. This increased lending is an indicator of an easing of lending restrictions by banks and a positive sign for the economy.

Elsewhere, data from China indicated that the country's trade surplus had increased by more than expected. Figures showed that the country exported $16.5bn more than it imported last month – a 13% increase on November's equivalent figures.

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