The divergence of a stronger euro and weaker yen has continued and the latest news stream has pushed it further. There are several sub-themes at work as well and they also have been underscored today. These include: 1) German recovery from Q4 contraction, 2) the divergence between German and French economic performance (suggesting a divergence of national interest too?), 3) the decoupling of sterling from the euro orbit, but we suggest here that while the UK economy is without a growth impulse, the market may be exaggerating the weakness, 4) the ECB is less likely to push against the passive tightening of financial conditions when it meets next week, and 5) the Chinese economic data is sufficiently mixed as not to lend the heavy Australian dollar much support. Following the FOMC, the US economic data needs to be well off the consensus to resist the current forces.