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The UK PPI and the Euro-zone industrial production reports, which were released during the European session, likely influenced trading.

UK output prices for home sales of manufactured products rose 6.2% from the previous year in March, the Office for National Statistics said today. Output prices climbed more than February`s 5.9% growth and 5.6% expected by analysts. On a monthly basis, output prices climbed at a faster pace of 0.9% compared with 0.5% in the prior month.

Meanwhile, input price inflation accelerated to 20.6% annually from 19.7% in February. Compared to prior month, input prices climbed 2.9%, up from 1.5% in February.

The pound lost ground against the euro after hitting a 6-day high of 0.7966 at 12:40 am ET Monday. The pound dropped to 0.8012 by about 3:55 am ET, compared to Friday`s closing value of 0.8032.

Euro zone industrial output grew 0.3% month-on-month in February, the Eurostat indicated today. Economists expected just 0.2% monthly growth in February. On an annual basis, industrial production increased 3.1% compared with 3.3% in January. However, industrial output rose more than 2.9% expected by economists.

Additionally, France`s business sentiment dropped to 105 in March from 106 recorded in February, a survey from the Bank of France revealed Monday. Economists were looking for a reading of 106 for March. The bank maintained its GDP growth estimate for the first quarter at 0.4%. The report added that growth carried over for 2008 should stand at 1.2% at the end of the first quarter.

The pound fetched 1.9767 against the dollar at 4:20 am ET Monday, up from last week`s close of 1.9721.

At about 3:55 am ET, the pound touched a low of 198.16 versus the yen. Thereafter, the pair bounced back and reached 199.56 in about couple hours. The pair was worth 199.02 at Friday`s close.

While uncertainty over the state of the global economy remains high, the Bank of Japan`s policy board agreed that its basic thinking on monetary policy remained unchanged, according to the minutes from the central bank`s March 6 and 7 policy meeting that were made public today morning.

The members of the board of governors felt they must be flexible in their policy response, the minutes also showed, but that careful study of the upside and downside risks to the economy were required.

Against the Swiss currency, the pound largely bounced between 1.9779 and 1.9828 in today`s early Asian deals. However, at about 1:45 am ET, the pair moved off the range and touched a low of 1.9713 by about 3:55 am ET. The pair then reversed direction it is now trading at 1.9780. The pound-franc pair closed last week`s deals 1.9723.