The message from officials is that the impact from Katrina will be limited.

We will get a test of the $1.10 low.

Under the grand coalition agreement, some compromise will obviously have to take place for things to work,

Failure to meet market expectations here will reinforce the market perception that the peak in US rates is clear, putting the dollar under renewed pressure.

As well as hints from Asian authorities that they are going to diversify, we now have the U.S. acknowledging it. It's going to put the dollar under a bit of pressure.

There is quite a big contrast between the political situation in Japan and Germany and investors are looking to play on that contrast.