Data releases ignored on Friday following Tsunami tragedy

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The Japanese Yen has had a mixed reaction following Friday' tsunami tragedy. Having initially sold the Yen, investors bought back into it on Friday, sending the US Dollar one Yen lower and Sterling one and a half Yen lower. Some reports suggest that insurers - Japanese and others - sold international investments to buy the Yen as they know they will need to settle claims over coming weeks and months. There were also suggestions that Japanese investors in general are inclined to repatriate assets in times of trouble.

Nobody seemed to pay any attention to Friday's economic data; UK factory gate prices from 5.0% to 5.3% and did nothing whatsoever for Sterling despite its implications for higher inflation. It seems investors were still disappointed that the Bank of England failed to deliver a surprise interest rate increase on Thursday.

Even a speech by Bank of England governor Mervyn King had no effect on Sterling. It seems the governor can no longer be relied upon to talk down Sterling. At the Stanford Institute on Friday, he repeated the theme of global rebalancing and anti-protectionism.

The Canadian Dollar delivered an unexpectedly low 15,100 increase in employment and fell by half a cent initially before recovering by the close of play. In the US, retail sales were close to target with an annual rise of 0.7%. The six point fall in the University of Michigan's consumer sentiment, which took it down to 68.2, also had little negative impact on the US Dollar.

It is a slow start to the week with only Eurozone industrial production due today. Although this is a key release for the Eurozone, it is Tuesday's US interest rate decision, the Empire State manufacturing survey and Eurozone unemployment numbers that will focus investors. While the US Federal Reserve is expected to keep interest rates at 0.25%, the Eurozone data will provide an important indication of Euro health following Spain's surprise credit rating downgrade last week. Wednesday is also busy with UK labour market data, US housing starts and February Eurozone inflation figures scheduled for release.