The appetite for USD was prevalent in London trading as overseas stocks saw weak follow-through to the massive US equity rally yesterday and European officials continued to highlight the risks to economic growth across the pond. European bourses managed to eke out a meager 0.8% rally on average thus far while US equity futures are pointing to some giveback to yesterday's rally as Obama's promise last night to use the "full force of government" has risk trades running for cover in early NY trading.

The big news for Europe was comments from some EU officials who said they are concerned with the recent weakness in GBP and its negative implications for the region and thus EUR. They noted in a report that the precipitous drop in the pound of late ''raises questions about the financial stability of the British economy.''

GBP/USD was pummeled more than -175 pips and sitting near 1.4380/90 just ahead of the NY open. EUR/USD meanwhile shed a little more than -100 pips into the 1.2760/70 area. The 1.2760 area looks important here in the short-term as this is hourly trendline support and also where the 100hr SMA lurks. Look for potential to 1.2700 initially if we break below here.

Yen strengthened after modest weakness overnight as the benefit from the better than expected Japanese trade numbers continued to pay dividends. The overall bias in USD/JPY still looks higher though while above 96.30/00 and we would expect an immediate barrier on a move into the 97.30/40 overnight highs.

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