The pound strengthened by 0.57 cents against the US dollar yesterday as rallying stocks saw investor risk appetite improve and demand for the risky pound increase. Confidence returned to the markets at the end of the first quarter 2009 as the FTSE 100 index rose 4.3% and the S&P 500 index (US) saw the close of its best month since October 2002. In the US both the S&P/Case-Schiller Home Price Index and the Chicago Purchasing Managers Index fell more than expected whilst consumer confidence data mirrored investor sentiment and improved. There were no major economic announcements in the UK.
Early in yesterday’s trading a report from the White House suggested that the US government would allow the car giants to go bankrupt, however officials later said that this report was inaccurate, alleviating investors’ concerns.
In today’s trading the pound has continued to hold its ground, with trading remaining around yesterday’s close. Later today Purchasing Managers Index manufacturing data and Halifax house price figures are released in the UK. In the US, MBA Mortgage Applications, ADP Employment Change, construction spending, ISM manufacturing and pending home sales are released. Investors will also be watching for any news from the G20.
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