The euro continues to trade within its recent ranges

The US dollar and Japanese yen continue to garner strength from safe haven flows in this extremely risk averse market. Despite banking woes in the US with most bank stocks at 20 year lows, the USD remains range bound.
Reports released today note that Bank of America may need an additional $80 billion infusion to shore up their books.
Banking sector jitters continued to spook investors after State Street Corp, the world's largest institutional money manager and Bank of New York Mellon Corp reported substantial losses on investments and sharply lower profits on Tuesday. This data lead to global bourses falling to their lowest levels in two months.
UK banking weakness continues to pressure the pound lower against the USD. Currently the dollar is at 7 ½ year highs against the GBP and if the pound falls below $1.3682, we could see a new 25 year low.

The euro continues to trade within its recent ranges, deriving strength from the pound’s weakness.
Speaking before parliament, European Central Bank President Jean-Claude Trichet played down the threat of euro zone deflation, while rebuffing talk that some euro zone member states would leave the union given the financial crisis.
On the data front, German producer prices fell 1% in December from the previous month, dragging the annual rise down to 4.3% from 5.3%. The monthly drop was less than expected and the yearly rise was slightly more than forecast.

The British pound has fallen 7% against the USD since Monday, though it is likely it will extend these losses on concerns that UK banks will need to shore up their financial health as the economy deteriorates, and that a government package announced earlier in the week may not help.
Data on Wednesday showed a sharp deterioration in Britain's public finances and a rise in joblessness, but such data and the release of minutes from the latest Bank of England policy meeting were overshadowed by banking sector concerns.
Though UK interest rates have fallen by 350 basis points since October to a historic low, the minutes to the latest BoE rate-setting meeting suggested more cuts are in the pipeline, which also burdens the Sterling. GBP losses accelerated after the head of the UK parliament's Treasury Committee, John McFall, called for the nationalization of Royal Bank of Scotland and Lloyds Banking Group.

Continuing to gain momentum from safe haven currency flows, as the rest of the globe is rocked by financial and banking strife, the Japanese yen remains firm.

The Canadian dollar tumbled against its US counterpart as the greenback rallied against a range of currencies as investors sought safety amid growing worries over the global economy.
The loonie firmed in early trading, after the Bank of Canada cut its key overnight lending rate by 50 basis points to a 50-year low of 1.0%.
The bank is expected to lower its key interest rate at least once more in the first half of the year to help steer the economy out of recession, most likely in March.

The beleaguered Australian and New Zealand dollars remain on the defensive after plummeting to 6-week lows for the Aussie and a 6-year low for the kiwi as mounting concerns about the global banking system hammered equities and drove extreme risk aversion.
A drop in Australian consumer sentiment for January also dragged down the currency, which has now shed over 7 cents since hitting a three-month peak earlier this month.
The grim data added to expectations of deep interest rate cuts in the coming months.
Weighing on the NZD is a combination of a poor economic outlook, weak data, and waning appetite for riskier investments has pressured the currency lower as much as 12% in the last 10 days.