Dollar electrocuted by the ‘current’ account deficit

Greenback’s glitters after the TICS report were washed out after reports affirmed that the buff was mostly on account of private investments and hedge funds flows and confirming that Japan, (the biggest holder of US treasuries) is reducing its exposure to the depreciating currency.
The current account gap widened more than expected (181.9bn) in the fourth quarter to a record $ 187.9bn coupled with US crude futures jumping to a record high, at around $56.63/barrel, adding to investors’ distaste with the dollar.
The single currency was also stimulated with rumors in the air that ECB would hike rates by September though the central bank was reluctant to comment on it.
Yen was bolstered overnight by the bank of Japan upgrading its assessment of the economy slightly, keeping its monetary policy unchanged. U.S. housing starts rose 0.5% last month to a 21-year high together with a robust industrial production but the joy was ephemeral for Uncle Sam as there are whispers from quite a few central banks to diversify their country's forex reserves.
Sterling also gained strongly at the dollar's expense, rising 0.9 percent to $1.9286 as soon as British Finance Minister Gordon Brown averred that he saw inflation at 1.75% this year reaching to 2% in 2006 and beyond.
Traders await today’s release of industrial production figures from the Euro zone, expected it to be up 1.3%. Technically Euro might enter into a territory of 1.3480-90 if it closes above the 1.3422 range seen earlier.