The US trade deficit with China rose to $201.6 billion last year, so easing trade tensions and the growing threat of protectionism will be key in talks.

GBP
The Royal Institution of Chartered Surveyors said that house prices were higher last month for the fifth consecutive month, but that the pace of the increase had slowed, however, this had little impact on the currency markets.

USD
It seems that currency traders have been weighing up the geo-political risks with regard to tensions in Iran, and, as a result, the dollar traded lower versus the major currencies overnight. This came in spite of the announcement of strong portfolio flows of $86.9 billion into the US for the month of February.

EUR
There are no major releases from the Eurozone and the single currency is likely to be swayed by tensions in the middle east.

JPY
The Yen may gain on speculation that China will face further pressure to let its currency appreciate when President Hu Jintao meets his US counterpart George Bush in Washington tomorrow. Mr Bush has said that he would like President Hu to explain how the Chinese government will allow the yuan to trade more flexibly and the currency will top the agenda at their meeting.

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