The Euro extended the previous day’s decline and slipped to a low of 1.2143 during the overnight trade as BaFin, the German regulator, banned naked short selling of European government bonds in order to temper the “exceptional volatility” in the financial markets.

Talking Points
• Japanese Yen: Benefits From Risk Aversion
• Pound: BoE Votes Unanimously in May
• Euro: Construction Rises the Most in 14-Years
• U.S. Dollar: Consumer Price Index,...

The British Pound rallied to a high of 1.4516 during the European trade as inflation exceeded the central bank’s upper limit for the third time this year, but failed to maintain the overnight rally as Bank of England Governor Mervyn King maintained a cautious tone and continued to see “substantial” slack in the real economy.

Talking Points
• Japanese Yen: Falls Across the Board on Risk Appetite
• Pound: Inflation Exceeds BoE’s Limit For Third Time This Year...

The Euro slipped to a low of 1.2437 during the overnight trade, which is the lowest level since November 2008, and the single-currency may face increased selling pressures going into the North American trade as investors scale back their appetite for risk.

Talking Points
• Japanese Yen: Rallies Against the Majors
• Pound: Weighed by Risk Aversion
• Euro: Extends Decline, Slips to Two-Year Low
• U.S. Dollar: Retail Sales, U. of Michigan Confidence...

The US dollar rallied through the Asian and European session hours Tuesday as the scent of fear wafted through the market. Speculative interests were put on the defensive starting in the early hours of the new trading session after a Japanese airline filed for bankruptcy protection in the nation’s fourth largest failure in history.

• US Dollar Rally Stunted by New Highs for the Dow, A Rough Start for Q4 Earnings
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