Despite the release of data confirming that the UK has officially escaped recession, the pound fell against the euro due to figures coming out showing less growth than was initially expected.

Pound Sterling – UK Markets

As investors awaited data confirming that the UK is officially out of recession, the pound rose against the euro and at 0952 GMT was trading at 1.152 before quickly taking a dive towards 1.1430 an hour later. This sentiment was echoed against the dollar as well. Today’s data marks a break away from 18 months of UK recession. However, caution is urged, figures were skewed by a combination of Christmas spending and the VAT increase on January 31st.

US Dollar – US Markets

At 1018 GMT the dollar traded at 0.616 against the pound and 0.709 versus the euro. A pile of economic news and data releases that are expected this week is causing hesitation amongst traders. The most significant event will be the release of the Federal Open Market Committee Statement tomorrow. The Fed are expected to hold interest rates steady and to continue making the same sounds regarding interest rates – which means they could be staying low for a considerable period of time.

Euro – European Markets

Slowing economic data, new US banking regulations and worries over Greece's financial situation, are some of the highlights that have increased risk aversion in recent trading for the euro, which traded at 0.867 against the pound and 1.408 against the dollar at 1030 GMT. Today's release of the German IFO Business Climate may be a good indicator of how businesses view the state of the Euro-Zone economy at the moment. Another important data release will be the Preliminary GDP from England, which will help to set the tone for this week's trading and is worth keeping an eye on.

Other Currencies – Highlights

We could see a decline in the yen during today's trading as the Bank of Japan is expected to hold interest rates steady, but could increase its programs of either emergency lending to Japanese companies or further purchases of Japanese government debentures. At 1034 GMT the yen traded at GBP146.18, USD90.057 and EUR126.88.