The euro is holding steady but at the lower end of recent trading ranges as markets continue to focus on the eurozone debt crisis. Optimism following new PMs in Greece and Italy has been undermined by yesterday’s rise in yields and markets will be on edge ahead of this morning’s release of the eurozone Q3 GDP report. Data released early this morning showed that German GDP grew at an expected rate of 0.5% in Q3, an acceleration from 0.3% in the previous quarter. This morning also sees the release of the German ZEW investor sentiment survey for November. The headline index is forecast to show yet another drop following last month’s fall to its lowest level in nearly three years.

Meanwhile, the dollar rose briefly against the yen in early morning trade amid some talk of further intervention from the Bank of Japan. However, ongoing worries over the eurozone debt crisis and investors’ risk aversion kept upward pressure on the yen, which remains a safe haven of choice. Some in the market say that stealth intervention may have occurred in recent days to put a brake on the yen but the BoJ will struggle to contain it against the weight of the market.

Sterling tracked the euro lower versus the dollar yesterday, hitting session lows of $1.5874 before finding some modest support. However, with market sentiment remaining fragile moves to the upside are likely to be limited. Versus the euro, the GBP underperformed but remains within sight of last week’s eight and a half month highs. This morning sees the release of the UK CPI report for October. The data are expected to confirm that the annual inflation rate remains well above the Bank of England’s 2.0% target but it should at least have eased back marginally from September’s 5.2%.

Today we have a number of good buying opportunities for Sterling sellers. We are currently trading at market resistance against the Euro with a buy over 1.16, AUD and NZD have both seen losses as market sentiment shifts and a good buy on the CAD and ZAR which have both seen positive gains this morning.