Meanwhile the true action of the night was in the pound which fell more than half a cent on the back of tepid UK inflation data. With UK Core CPI printing at 1.3% on a year over year basis the BOE has no ammunition to make a hawkish case against inflation and the pressure of the MPC from cable doves looking to loosen monetary policy could make lower UK rates a distinct possibility in the near future. As a result, the pound dropped to within a few points of the 1.7600 figure as speculative accounts bet on further interest convergence with the greenback. In general it appears as though the currency market is awaiting US economic data this week before making any directional moves. Wednesday TICS report may set the tone for the rest of the week. If the number prints above $80 Billion - far in excess of the -$65 Billion US Trade deficit, dollar bulls could regain momentum. However, if there is marked contraction in foreign capital inflows, dollar longs could be very vulnerable to a sell off as all the old fears regarding US Balance sheet position will flood the market once again.