All major currencies are tracking higher against the buck in early Monday trade, with the Euro standing out as the clear outperformer. The relative strength in the single currency has been driven off a number of factors, which ultimately could keep the currency well bid for the remainder of the day. The main driver has been attributed to the Basel Regulator rules on bank capital ratios which have come in less tight than many analysts had been speculating. This is a net positive for a currency that has been under some intense pressure over the past several months over fears of instability within the local banking sector. Euro bulls are also finding comfort in the fact that the markets are holding up quite well despite ongoing concerns over sovereign debt issues in Ireland and other Eurozone economies. Finally, China industrial production and domestic demand data has come in quite solid and the impressive results have also helped to bolster investor risk appetite and add to the rally in global equities prices. Looking ahead, the European calendar is extremely light, with the only noteworthy release coming from Swiss producer and importprices (-0.1% expected) due at 7:15GMT. Things are also super quiet in North American trade, with the only release for the session not seen until the US afternoon, in the form of the monthly budget statement (-$95B expected) due at 18:00GMT. On the official circuit, Treasury Secretary Geithner speaks at the Congressional Hispanic Caucus Institute at 12:30GMT, while Fed Lockhart is on the wires a little later at 16:30GMT. US equity futures are already higher by nearly 1%, while oil prices have also been tracking higher on similar correlations. Meanwhile, gold trades unchanged on the day.

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