There is general weakness across the board for many major currencies today – with higher risk currencies like the Euro and Australian dollar suffering.  With European troubles in the backdrop – for now – it seems that traders have returned to economic fundamentals.  Notably, Japanese economic troubles continue, with the Reserve Bank of Australia now having to deal with the specter of inflation.  As a result, given the shift in focus, traders will be paying attention to today’s Federal Open Market Committee decision and subsequent comments.  Although nothing is expected to change, market players will be listening attentively to Chairman Bernanke’s following commentary for further dollar direction.

1.  Although lower, the euro remains somewhat supported in the morning session following better than anticipated results on the German business front.  According to the Ifo Institute’s business climate index, industry leaders are the most confidence they’ve been in the last five months.  The survey jumped to a reading of 108.3 in January, from December’s 107.3.

2.  In a surprising turn of events, the pace of consumer inflation remains elevated in Australia – rising by 3.1% annually in the fourth quarter.  Although below estimates of a 3.3% gain, the figure – according to the Bureau of Statistics – still remains above the top benchmark set by the country’s central bank.

3.  Japanese economic woes continue as the country posted the first annual trade deficit in 3 decades.  Ministry of Finance reports showed a shortfall of almost 2.5 trillion yen for all of 2011.

4.  Quarter over quarter comparisons showed a 0.2% decline in fourth quarter gross domestic product in the UK – compared to a 0.6% increase in the third quarter.  The figures, released by the Office for National Statistics, cast a gloomy economic picture on the UK economy – lending to speculation that further BOE stimulus may be on the way.

5.  According to Bank of England meeting minutes this morning, central bankers voted unanimously to keep benchmark interest rates at their current standing.  Witnessing that inflationary pressures had abated in the last couple of months, policymakers saw no need for “a change in policy at this meeting”.  The BoE is widely expected to extend their asset purchasing plan when the current facility ends next month.

6.  US pending home sales slumped in the month of December – following a 19-month peak hit just the month prior.  According to the National Association of Realtors, index readings dropped by 3.5% on a monthly basis.