There was fresh uncertainty surrounding the outlook for monetary policy with some renewed speculation that the Fed could sanction additional quantitative easing. There were no substantive comments from Fed officials. The Euro gained ground following the data as the US currency was subjected to underlying selling pressure, although the currency was still unable to make much headway. The Euro was hampered by further structural fears with continued speculation that the difficulties in Spain would intensify. There was a further widening in yield spreads and a deterioration in confidence surrounding the banking sector. There was a small decline in Euro short positions according to the latest speculative positioning data and the bias remains for Euro puts which will lessen the potential for Euro short covering. The Euro remained broadly resilient in subdued trading conditions on Monday, but was unable to move above the 1.3150 area.