China’s somersault on currency peg dents dollar

In the space of 2 days (after indications of nonchalance to global pressures to revalue yuan), China relented and agreed to discuss the currency peg at the G-7 meeting.
But China’s concurrence to sort out this issue may just be tactics to get the heat off its back from the global heavyweights and we may have to wait for the actual event for sometime.
Yen gained to 102.50 levels on the news before Japanese industrial production and consumer spending (that fell by 1.2% and 0.6% in the December reading), exerted some pressure on Yen in the Tokyo session today. But Yen still keeps its head above the critical support of 103.35.
Euro found strength from an unanticipated rise in the Germany’s IFO business sentiment survey (11-month highs), briefly stabbing at the 1.31 area before retracing to 1.3070 levels in the morning session today.
Sterling rushed to a 2-cent gain after the growth in services sector more than made up for the lull in manufacturing, giving some respite to the Bank of England grappling with a slight slowdown in the economy. Belying this worry was the Q4 GDP growth that recorded a rise of 0.7% (expected: 0.5%), revoking the talks of a rate cut.
Despite the fall of dollar against majors on the Chinese whispers on Yuan, the greenback finds some technical support ahead of the GDP data release tomorrow, which is expected to show that the US economy has shown fastest growth since 1999.