Despite an easing of concern over the UK's debt, the pound remains under broad pressure, with the sterling/kiwi price below 2.24

The pound capped sharp losses incurred against the kiwi, clawing back over 2.24 on Friday in the wake of encouraging news from Moody's rating agency.

• The kiwi was softer on Friday, consolidating strong gains after the Reserve Bank of New Zealand shifted their policy to earlier rate rises.
  
• The pound was able to make slight gains, reversing early losses, after Moody's rating agency announced that it had no intention of cutting the UK's triple A rating.
  
• However, the pound has moved lower this morning, unable to consolidate its position as concerns linger over the UK's fiscal position.

Pound made marginal gains on Friday, but has levelled off this morning

Sterling found slight support after a sharp sell-off against the aussie earlier in the week, with sentiment improved following comments from Moody's rating agency.

• Negative sentiment built up against the UK on fiscal concerns eased on Friday after Moody's announced that they had no imminent plans to cut the UK's credit rating.
  
• Although it is still broadly accepted that Britain's debt issues may impede the recovery, the news from Moody's did allow the pound a brief reprieve.
  
• In trading this morning the pair are relatively level, unchanged from the end of week closing price and hovering around 1.78.

Euro is trading lower against the US dollar, with selling of the haven currency as risk improves now starting to fade

The single currency slipped to a one-month low of $1.4589 against the dollar on Friday in the wake of positive US data and as concerns over eurozone credit ratings weighed.

• The US dollar rose as gains in retail sales and consumer confidence increased speculation that the Federal Reserve will raise borrowing costs next year.
  
• The stronger-than-expected US retail sales, which rose 1.3% in November after climbing a revised 1.1% in the prior month, boosted optimism about the outlook for the world's largest economy.
  
• Analysts noted that there is currently a decisive shift into a new trading regime, with a move from of the prime funding currency away from the dollar into the yen.
  
• In addition, the euro continued to weaken on speculation the credit ratings of more European nations will be lowered. The economic situation in Greece and Ireland has been described by analysts as "intolerable," and they could need bailouts before the end of next year.
  
• The euro has firmed slightly this morning though, up 0.3% after news that Dubai had averted a possible debt default.

The US dollar is holding it strong position, with the price down in the low $1.60s

The pound edged slightly lower against the US dollar on Friday in the wake of positive US data, with the pair closing the week at 1.6260.

• Sterling fell against the dollar as stronger-than-expected US data lent broad support to the US currency, while worries about the UK's shaky situation continued to weigh on sentiment towards the pound.
  
• Consumer sentiment in the US increased to 73.4 for December, compared with 67.4 in the previous month. Forecast was for an increase to 68.8.
  
• Retail sales were also improved in the US, supporting the currency. That the dollar gained on Friday from positive news supports growing evidence that the currency is no longer being broadly sold as risk improves.
  
• However, the rating agency Moody's prevented sterling from sliding too far, remarking that the UK is in no imminent danger of a ratings downgrade.
  
• In trading this morning the pair are holding relatively steady and are likely to remain range bound with no major economic data out today in either the UK or US.

Pound was well supported against the euro at the end of last week, but is down again today

The pound reached a two-week high against the single currency on Friday as sentiment toward sterling improved, closing the day 0.7% higher.

• Sterling rose against the euro after a major ratings agency said Britain's top sovereign rating was under no immediate threat, although concerns about UK fiscal health remained.
  
• Moody's Investors Service said the AAA ratings of Britain and the United States were not under threat of a downgrade right now, although a worst case scenario foresaw a cut by 2013.
  
• Sterling showed little reaction to data showing British input costs rising at their fastest pace in a year in November, which added weight to the Bank of England's forecast for inflation to rise sharply in the short term before falling back.
  
• The euro was also under continued pressure with Greece and Ireland among countries in an "intolerable" economic situation that could lead to bailouts before the end of 2010.
  
• In trading this morning, the pound has relinquished its brief gains, with the price back in its mid 1.10 trade range.
  
• With little data out today, the markets may take direction from eurozone industrial production, which is expected to show a sharp fall in output following disappointing readings from both France and Germany.