The euro and pound rose on the first trading day of the week as risk appetite returned to the currency market after US Treasury Secretary Tim Geithner promised to release details of a new plan to use a private and public partnership funds to remove toxic assets off the balance sheets of US banks. Both Asian and European equities rose providing a strong bid tone to the risk currencies. Cable rallied through the 1.4100 handle and euro approached the psychologically key 1.3000 level by midday European trade.

Uncertainty about the future of President-elect Barack Obama’s cabinet and staff are mounting. We are now met with controversy over one of the most crucial positions, Treasury Secretary. It was recently reported that the nominee for the position, Timothy Geithner, failed to pay a large portion of his taxes, casting doubt upon the certainty for his seemingly inevitable nomination. These indiscretions involved $34,000 of unpaid social security and Medicare payments.