The USD and JPY have seen some marginal strength in overnight Asian trade, EUR/USD down at 1.3955 from a North American close Friday up around 1.4020, while EUR/JPY is down at 137.20 from around 137.90.

Risk appetite has been put on the backburner, at least at the start of the week. Traders will have noted a couple of AEP articles in The Telegraph, one highlighting the ongoing problems in Latvia, the other the deepening credit crisis in Germany.

A couple of geo-political factors will have been thrown into the mix, the increasingly virulent sabre rattling coming out of North Korea and the post election civil unrest in Iran.

The USD will also have got some decent underpinning in it’s own right from comments made at the weekend by the Russian Finance Minister. Alexei Kudrin said Russia has confidence in the dollar and that there is no immediate plans to switch to a new reserve currency.

A worrying development in comments from a WHO advisor, and one of the world’s leading virologists, who has warned that the swine flu virus shows similarities with Spanish flu which killed 50 million in 1918. He warns that we should be prepared for the worst. The comments come just as the virus claims it’s first victim in the UK.