The pound enjoyed a successful day against the single currency yesterday, rising above the 1.0900 mark on improved risk appetite. Manufacturing data was released within the UK which was better than expected, standing at 39.1 in March compared to 34.9 the previous month – the level of 39.1 is the best the manufacturing sector has seen since October last year. Many were expecting the reading to be 35, with the fiscal stimulus packages of the previous months possibly taking affect. However, it should be stressed that the reading still lies near historically low levels, and anything less than 50 is within contraction territory. News coming out the eurozone was poor, with the Republic of Ireland revealing that unemployment benefit set a fresh record high last month, with unemployment estimated to be standing at 11%, confirming the serious economic trouble the country is facing.
The pound is continuing to rise against the single currency in early trading this morning, following news that British housing data for March showed the first rise in British house prices since October 2007, according to Nationwide. The building society reported that house prices were 0.9% higher in March compared to a month previously, although they do stress that it is far too early to conclude that the market has turned.
The major news today will surround the European Central Bank’s interest rate decision due at 12.45 BST today. The Caxton FX analysts are forecasting the central bank will cut rates by 50basis points, and of equal importance will be whether there is any indication of quantitative easing. Indeed, yesterday the Director of the International Monetary Fund, Dominique Strauss-Kahn, indicated that the ECB could resort to purchasing assets with newly created money, similar to what is being seen in the UK and US at present.
The UK releases its PMI construction figures this morning, giving an indication of how the sector is fairing at present. Investors will also be looking out for any comments made at the G20 summit today.
Yes the last week or so has been a welcome come for day traders and indeed investors alike with global markets showing positive signs of recovering and with news coming in that the meeting of the G20 nations have pledged trillions of dollar to tackle recession it means there is something to look forward to the coming weeks shall be ones to look forward and a great time to be back with day trading.
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