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Stabilizing at the 1.8850 figure in the overnight, traders took the pound lower following a survey that showed non-manufacturing activity slowed slightly below the previous reading in the month.  Falling to a 59.2 reading, the ISM report suggested a mild slow down in the services sector, a sector that contributes approximately 60 percent to the overall economy.  Heading into the North American session, the underlying spot retraced back slightly before comments by Chairman Bernanke sparked another round of selling.  Indicating that inflationary pressures are still in the making, the incumbent stated that Fed officials remain steadfast in their mission to quell price increases.  This boosted the probability of a June rate hike, bolstering a move up in the futures market as traders priced in a 70 percent probability compared with a previous 50 percent guess.  Looking ahead, traders will be looking towards HBOS housing prices in offering further suggestions of stabilization in the UK economy.  Higher housing prices would add to the notion that consumers may have the incentive to spend should residential properties remain stable and growing.

Rumormill

Offers to the upside continue to contain the price action from breaking to the upside even on profit taking going into the Asian session.  Selling pressure surrounds the 1.8885 and 1.8750 figures with comparative bidding residing at the even figure and slightly above.   

GBPCHF

Risk Aversion Hits Cross Hard

Swiss selling took place in the morning session as a risk aversion attitude hit the market ahead of the North American hours.  Falling slightly against the greenback, risk aversion hit the GBPCHF cross hard and exacerbated the crosss decline as the move was coupled with pound bearishness on a slower PMI services report.  Subsequently, as in the major pairs for the day, the move was reversed on hawkish indications by Chairman Bernanke as his comments hit the wire and upped the probability of a June rate hike.  Moves on both sides were heavy as liquidity on the day was thin attributed to a Swiss holiday being observed.  From here on in, with economic data thin on the Swiss front, traders will be eyeing housing data in the UK along with heavy consideration from this weeks central bank decision.  Expected to leave rates at the current 4.5 percent, traders will be forwarding attention to the European central bank decision, anticipated to reveal rates on the same session.

Rumormill

Selling pressure continues at the 1.2070 and 1.2085 of the USDCHF major level, keeping the cross underwater heading into the Asian session.  Comparatively, bids look to arise at the 1.2015 figure.  This translates into a bid area of 2.2580/70 on the cross as selling pressure looks to emerge around 2.2640.

AUDNZD

Cross Fights Back After Bearish Pull

Heavy offers were taken on the AUDNZD cross at the open of the New York session as US investment houses were rumored to be leading the charge.  Thin Kiwi liquidity also helped to exacerbate the move as the cross dropped 0.5 percent on the day to rank as the third mover on the session.  Adding to the bearish sentiment were Bernankes statements as the Aussie major declined against the greenback with the Kiwi hardly blinking, ranging sideways for most of the session in a tight 35 pip range.  With both the Reserve Bank of Australia and New Zealand moving to decide on interest rates in the beginning of this week, traders will be focusing on any further suggestions of a rate decision one way or the other.  Anticipation calls for no rate decisions by both central banks with some slight bias for another rate hike in the Kiwi decision.