The pound fell sharply across the board after the release of U.K. public sector net borrowing data. Net Borrowing came out at £14.5bln; markets had expected debt levels to improve to £13.2bln from the previous £16bln. Disappointment at failing to meet forecast and revisions of the previous figure to £17bln weighed heavily on the pound. Sterling losses against the euro were capped and reversed as trader took profits in EUR/USD positions after a week of gains by the euro.

Corporate earnings were mixed with Goldman Sachs quarterly earning falling short of expectations although profits did beat the markets views. Added to this US housing start fell to 540K in June, down from May’s 578K release. The data added to the perception that the US economy was indeed slowing and pulled the greenback lower.

The Bank of Canada raised interest rate yesterday by 25 basis points as expected and strengthened the Canadian dollar.

There is no economic data scheduled for release today although the Bank of England releases the minutes from its last MPC meeting, a slip vote is expected. Fed Chairman Ben Bernanke testifies before Congress this afternoon and corporate earnings will remain of interest today.