Despite an easing of concern over the UK's debt, the pound remains under broad pressure, with the sterling/kiwi price below 2.24

The pound capped sharp losses incurred against the kiwi, clawing back over 2.24 on Friday in the wake of encouraging news from Moody's rating agency.

• The kiwi was softer on Friday, consolidating strong gains after the Reserve Bank of New Zealand shifted their policy to earlier rate rises.
  
• The pound was able to make slight gains, reversing early losses, after Moody's rating agency announced that it had no intention of cutting the UK's triple A rating.
  
• However, the pound has moved lower this morning, unable to consolidate its position as concerns linger over the UK's fiscal position.

Pound made marginal gains on Friday, but has levelled off this morning

Sterling found slight support after a sharp sell-off against the aussie earlier in the week, with sentiment improved following comments from Moody's rating agency.

• Negative sentiment built up against the UK on fiscal concerns eased on Friday after Moody's announced that they had no imminent plans to cut the UK's credit rating.
  
• Although it is still broadly accepted that Britain's debt issues may impede the recovery, the news from Moody's did allow the pound a brief reprieve.
  
• In trading this morning the pair are relatively level, unchanged from the end of week closing price and hovering around 1.78.

Euro is trading lower against the US dollar, with selling of the haven currency as risk improves now starting to fade

The single currency slipped to a one-month low of $1.4589 against the dollar on Friday in the wake of positive US data and as concerns over eurozone credit ratings weighed.

• The US dollar rose as gains in retail sales and consumer confidence increased speculation that the Federal Reserve will raise borrowing costs next year.
  
• The stronger-than-expected US retail sales, which rose 1.3% in November after climbing a revised 1.1% in the prior month, boosted optimism about the outlook for the world's largest economy.
  
• Analysts noted that there is currently a decisive shift into a new trading regime, with a move from of the prime funding currency away from the dollar into the yen.
  
• In addition, the euro continued to weaken on speculation the credit ratings of more European nations will be lowered. The economic situation in Greece and Ireland has been described by analysts as "intolerable," and they could need bailouts before the end of next year.
  
• The euro has firmed slightly this morning though, up 0.3% after news that Dubai had averted a possible debt default.

The US dollar is holding it strong position, with the price down in the low $1.60s

The pound edged slightly lower against the US dollar on Friday in the wake of positive US data, with the pair closing the week at 1.6260.

• Sterling fell against the dollar as stronger-than-expected US data lent broad support to the US currency, while worries about the UK's shaky situation continued to weigh on sentiment towards the pound.
  
• Consumer sentiment in the US increased to 73.4 for December, compared with 67.4 in the previous month. Forecast was for an increase to 68.8.
  
• Retail sales were also improved in the US, supporting the currency. That the dollar gained on Friday from positive news supports growing evidence that the currency is no longer being broadly sold as risk improves.
  
• However, the rating agency Moody's prevented sterling from sliding too far, remarking that the UK is in no imminent danger of a ratings downgrade.
  
• In trading this morning the pair are holding relatively steady and are likely to remain range bound with no major economic data out today in either the UK or US.

Pound was well supported against the euro at the end of last week, but is down again today

The pound reached a two-week high against the single currency on Friday as sentiment toward sterling improved, closing the day 0.7% higher.

• Sterling rose against the euro after a major ratings agency said Britain's top sovereign rating was under no immediate threat, although concerns about UK fiscal health remained.
  
• Moody's Investors Service said the AAA ratings of Britain and the United States were not under threat of a downgrade right now, although a worst case scenario foresaw a cut by 2013.
  
• Sterling showed little reaction to data showing British input costs rising at their fastest pace in a year in November, which added weight to the Bank of England's forecast for inflation to rise sharply in the short term before falling back.
  
• The euro was also under continued pressure with Greece and Ireland among countries in an "intolerable" economic situation that could lead to bailouts before the end of 2010.
  
• In trading this morning, the pound has relinquished its brief gains, with the price back in its mid 1.10 trade range.
  
• With little data out today, the markets may take direction from eurozone industrial production, which is expected to show a sharp fall in output following disappointing readings from both France and Germany.

Kiwi is trading strongly on the back of an upbeat rate statement from the RBNZ

The New Zealand dollar made strong gains yesterday, lifted by the prospect of the removal of monetary stimulus measures from the middle of 2010.

• The kiwi gained a further 1.2% on the poundafter the RBNZ, which as expected left interest rates on hold at 2.5%, said in its accompanying statement that if the economy continued to recover, conditions may support the removal of monetary stimulus "around the middle of 2010."
  
• Striking a hawkish tone at its policy meeting, the Reserve Bank of New Zealand signalled that it could follow other commodity producers such as Norway and Australia, and move to raise interest rates as early as next April.
  
• The New Zealand dollar was also given further support as Alan Bollard, RBNZ governor, indicated that he was less worried about the strength of the currency.
  
• In this morning's session the pound has pared its losses, recovering over a cent to bring the price back over 2.24.

Aussie continuing to trade strongly against a broadly weaker sterling

The aussie enjoyed another strong run yesterday, posting gains of 0.75% against the pound as investors bet on further interest rate rises in Australia.

• Strong employment data was a further boost to the pace of the Australian recovery and raised expectations that the RBA would move to increase rates at the next meeting in February.
  
• In the UK, the pound came under pressure on continued concern over the fiscal instability. The Bank of England left policy unchanged in their meeting, recognising the need to maintain stimulus measures.
  
• The size of the UK deficit, close to 12% of GDP, has raised concern the UK could lose its triple-A credit rating if it does not take sufficient action, which is weighing on the pound.
  
• The pound is trading slightly higher this morning as investors look to book profits going in to the weekend, with the price currently hovering around 1.78.

Euro is continuing to trade well below its 1.50 recent highs, under pressure from the financial health of certain eurozone nations

With little new information for the markets to take direction from yesterday, the euro/dollar pair held in range, eventually closing little changed from Wednesday's closing price.

• The single currency did post slight gains in the early afternoon session after a narrower-than-expected US trade deficit for October reduced safe-haven demand for the greenback.
  
• Data revealed that the US trade deficit narrowed in October to $32.94 billion from the $35.65 revised deficit in September, and against market expectations of an increase to around $37 billion.
  
• However, this was offset by US weekly jobless claims, which rose last week by 17,000 to 474,000, more than twice the market consensus of an increase by about 8,000 claims.
  
• Ongoing concerns over the fiscal health of Greece and Spain also capped gains on the single currency.
  
• Despite the higher-than-expected claims, the US equity markets traded on a positive note yesterday, which buoyed risk demand and enabled the euro to recover back over 1.47.

Little impact from the BoE statement yesterday, thought the pound is up against the USD this morning

Having given back early gains against the US dollar following the BoE announcement, sterling did find late support from higher equities to close the day on a positive.

• The Bank of England yesterday opted to maintain their quantitative easing programme, but did not expand it beyond the £200 billion already committed.
  
• Sterling had earlier stemmed losses from the previous day in the wake of finance minister Alistair Darling's pre-budget report and persistent concerns about Britain's fiscal health. But the pound did lose ground in the wake of the BoE decision with no mention of future rate rises.
  
• Until recessionary pressures ease we are unlikely to see the Bank unwinding stimulus measures, and further monetary easing will remain on the table.
  
• Sterling erased losses, though, after the US markets opened on a positive note, bringing the European equities out of the red and lending slight support to the UK currency.
  
• The pound is continuing to trade higher this morning, with the price currently nudging just over 1.63 as investors await key retail sales data from the US, released at 13:30.

Sterling and euro are trading within range, each under pressure from fiscal concerns

The pound relinquished early gains against the euro after the Bank of England made no mention of withdrawing extreme stimulus measures, with the pair closing near level for the day.

• As analysts had widely expected, the Bank of England kept its key interest rate on hold at a record low 0.5% and its quantitative easing asset-buying programme unchanged at £200 billion.
  
• Sterling had made some progress in the morning session, but gave these gains back following the BoE statement and as concern over Britain's precarious fiscal position continued to weigh.
  
• The prospect of low interest rates for an extended period will continue to put pressure on the pound, as policymakers are likely to wait for confirmation of economic growth in the fourth quarter of 2009, before they contemplate tightening policy.
  
• Chancellor Darling on Wednesday noted the daunting scale of spending cuts and tax rises needed to bring Britain's budget deficit into line, which means the BoE could be forced to keep monetary policy loose to compensate.
  
• With no new information for the markets, the sterling/euro pair traded sideways for the majority of the afternoon and evening session.
  
• This morning, the pound is marginally higher, but the pair are likely to remain tightly range bound throughout the day.

The RBNZ have stated that monetary policy will begin to tighten, boosting demand for the kiwi

Sterling lost over four cents, or 1.8% to the kiwi dollar in trading yesterday as the Reserve Bank of New Zealand hinted at future rate rises in their policy meeting.

• Sterling was under pressure throughout European trading after the UK's pre-Budget Report did little to ease lingering concerns over Britain's debt problems.
  
• The Chancellor, Alistair Darling, outlined various spending cuts and taxes, as well as lowering this year's growth forecasts, but little encouragement was given that the government would be able to curb the spiralling deficit.
  
• In the evening, the kiwi received a renewed boost after New Zealand's Central Bank opened the door to rate rises from as early as next April.
  
• The RBNZ said that it may start withdrawing monetary stimulus by the middle of 2010, amid an improving local and global economic outlook.
  
• This morning, the market is continuing to move the kiwi higher, with the sterling/NZD pair now trading at a one month low, currently hovering just below 2.24.

Strong employment figures are supporting the aussie

The pound slid 0.7% against the Australian dollar yesterday after the UK's pre-Budget Report failed to abate fears over the UK's deteriorating fiscal stability.

• Sterling lost ground after investors questioned the feasibility of the government's forecasts for borrowing and spending in the report.
  
• Some investors were skeptical of Darling's 1.5% growth projection for the UK economy in 2010, which in turn undermined his outlook for bringing down the country's deficit and debt.
  
• The aussie is continuing to trade strongly this morning in the wake of positive employment data from Australia.
  
• The data revealed the economy added 31,200 jobs last month, beating forecasts of a modest rise of 5,000. The result brought the overall unemployment rate down to 5.7% from 5.9% support strong aussie demand.
  
• Analysts noted that with unemployment now potentially on the decline, the RBA will be more confident in returning their base rate to pre-recession levels.

The single currency nudged higher against the USD yesterday and is holding around 1.47 so far this morning

The single currency reversed its recent downward trend against the US dollar, posting slight gains as the market felt the greenback's rally may have been over-stretched.

• The euro initially made up solid ground as investors reassessed a rally that had sent the greenback to its highest level in more than a month.
  
• The US dollar had advanced broadly on Tuesday after ratings agency Fitch downgraded Greece to below the single A bracket for the first time in a decade.
  
• The euro reversed these losses though, on the view that the weak status of Greece's public finances was already well known and that the currency's move had been overdone.
  
• In the afternoon, the dollar pared some its losses after the rating agency Standard & Poor's lowered its outlook on Spain's credit rating, adding to concerns that sovereign credit problems have not abated.

Concern over British fiscal instability weighed on sterling yesterday as it moved lower against the USD

Sterling continued its downward trend against the US dollar, edging lower as sentiment weighed on the fiscal health of the UK economy.

• The pound dropped to its lowest level in almost two months at $1.6169 as the UK government's pre-Budget report focused attention on the health of the country's finances.
  
• Concerns over government debt have come to the fore in recent days following a downgrade of Greece's credit rating by Fitch, the ratings agency.
  
• This has weighed on sterling, given the possibility that the UK may face a similar fate if it does not get its public finances in order
  
• The government's report deemed it too early to begin an assault on the UK's budget deficit, however, because of fears that deep spending cuts could choke off an economic recovery.
  
• The pound did recover some of its steep losses though as US equity markets enjoyed a slight rally later in the day lending support to the weakened UK currency.
  
• In trading this morning, the pound is continuing to move lower as investors await the BoE's rate decision. The market is widely expecting to see rates hold at 0.50%.

The UK currency was under pressure yesterday after the pre-Budget Report failed to ease concerns over the UK economy

After briefly spiking to an intra-week high, the pound slid back against the single currency yesterday as investors digested Chancellor Alistair Darling's pre-Budget Report.

• In the Report, the Chancellor admitted that the recession had turned out to be deeper than he predicted in April. He said he expected the economy to have shrunk by 4.75% in 2009, instead of the 3.25 - 3.75% he forecast earlier in the year.
  
• While cutting his growth forecast for this year though, Mr. Darling kept his prediction of a strong recovery next year and in 2011 and 2012.
  
• He talked of the "strength of the UK economy", predicting growth of between 1 and 1.5% in the coming year, which gave the pound brief support.
  
• However, the Report did little to ease ongoing fears of the UK's fiscal debt. With increased borrowing planned for next year, concerns are likely to linger over the possibility that the UK's triple-A rating may come under threat.
  
• In trading today, the markets will be looking to the BoE's interest rate decision at 12:30 and the accompanying statement where they may shed some light on when quantitative easing measures will come to an end.

Kiwi traded strongly yesterday as risk appetite was buoyed follwoing an encouraging announcement from the Bank of America

The kiwi dollar was higher against a broadly weaker sterling, which came under pressure following weak economic figures.

• The UK services sector data revealed that the industry expanded at a slower rate than in previous months, breaking its upward trend, and dulling demand for the pound.
  
• The kiwi was also buoyed as the safe haven appeal of the US dollar and Japanese yen came under pressure following an announcement from the Bank of America to repay bailout funds.
  
• The New Zealand currency climbed by just over a cent, but was unable to push higher as weak manufacturing data from the US undermined risk appetite.
  
• The pound is up in early trading though as investors pare back risky bets ahead of important US employment figures.

A weak sterling edged lower against the aussie yesterday but investors are paring back their risk trades this morning

The pound slipped back below 1.79 against the aussie dollar, under pressure from weak UK services data and as positive news from the Bank of America boosted risk.

• In early trading, the Bank of America announced that they are going to start repaying taxpayer bailout funds, which gave a boost to investor confidence, lifting perceived riskier currencies to the detriment of the safe-haven currencies.
  
• In the UK, weaker-than-expected services sector data raised concerns over the strength of the economic recovery, which put the pound on the back foot throughout the day.
  
• In trading this morning though, the price is moving back in sterling's favour as investors lock in profits to protect themselves against sharp market moves before key US employment data later this afternoon.
  
• The monthly non-farm payrolls data tends to spark choppy trading and investors typically turn cautious ahead of its release, exiting long positions in "riskier" currencies.

The euro trimmed stronger early gains after weak US data saw investors pare back risky bets

The euro rose to a 16-month high in early trading, but pared back its gains against the dollar, to close just 0.05% higher after weak data from the US offset risk appetite.

• The dollar was under broad selling pressure in the morning after the Bank of America announced it will repay $45 billion of funds received under the Troubled Asset Relief Program.
  
• The single currency received a further boost, spiking briefly over $1.51 following the European Central Bank's announcement that it will start to unwind extreme stimulus measures that it considers are no longer appropriate now that the recession is easing.
  
• The ECB President, Jean-Claude Trichet, said that the December installment of the 12-month refinancing operation for banks would be the last.
  
• However, the euro trimmed gains as Trichet added the current interest rate remains appropriate, and he reiterated that the winding down of stimulus measures did not signal a change in rates.
  
• Later in the afternoon session, weak data from the US manufacturing sector saw the euro pull back further as concern grew over the strength of the US recovery.
  
• The data helped fuel a late sell off in US equity markets, further sapping risk demand, and supporting a slight dollar rebound.

A broadly weaker sterlingl lost ground to the USD yesterday but has posted gains in trading this morning

The pound dropped nearly a cent against the US dollar following a below forecast figure from the UK services sector.

• Sterling traded strongly against the haven currency in early trading after the Bank of America announced that it was ready to repay taxpayer bailout funds, which boosted investor confidence.
  
• However, the pound came under pressure after data revealed that the UK services sector expanded at a slower rate in November than the market had anticipated.
  
• Although the figure marked the seventh consecutive month above the 50 level, which indicates expansion, the below-forecast headline number was enough to push the pound off an earlier one-week high against the dollar.
  
• In the afternoon, the US currency received support following data that showed US manufacturing contracted in November after growing modestly the prior month, which raised doubts about the strength of the US economy and undermined risk appetite.
  
• The manufacturing data offset more encouraging figures from the Labour market which again showed a slowing rate of unemployment claims this week.
  
• In trading this morning, the pound has risen nearly half a percent as investors await key employment data released in the US at 13:30.

Weak UK data brought the pound down yesterday, but it is recovering losses this morning

Sterling fell by 0.6% against the single currency yesterday after a survey showed Britain's services sector grew more slowly than expected in November.

• The Chartered Institute of Purchasing and Supply activity index fell to 56.6 last month from October's two-year high of 56.9. That was the seventh consecutive month above the 50 level, which indicates expansion, but below expectations for a rise to 57.0
  
• As the services sector is regarded as the driving force of the UK economy, any hesitation in its expansion causes concern for the UK economy and is therefore sterling negative.
  
• The euro received a boost in the afternoon after the ECB announced that it would start to remove loose monetary policies, telling reporters that "not all our liquidity measures are needed to the same extent as in the past."
  
• Trichet hinted about an exit strategy so the knee-jerk reaction was euro positive, but he was explicit in reiterating that the withdrawal of stimulus did not signal a change in interest rates, which capped gains.
  
• This morning the pair is continuing to trade within range, with the price currently hovering back over 1.10.

Kiwi traded strongly yesterday, buoyed by rising risk appetite following improved equity prices

The pound closed down nearly a cent against the kiwi dollar yesterday, but recovered significantly from a one-week low of 2.2712 hit earlier in the day.

• The high-risk kiwi was the biggest gainer against the US dollar yesterday, which spilled over into the kiwi/sterling rate, pushing the former higher.
  
• Global equities rallied strongly as risk appetite came firmly back to the table following a move by the UAE central bank to reassure debts built up by Dubai banks.
  
• The kiwi was also found support as the yen was broadly sold following a decision by the Japanese central bank to extend monetary policy easing measures to fight deflation and help the ailing economy while holding rates at 0.1%.
  
• The New Zealand dollar is continuing to trade strongly today as investors' appetite for riskier higher-yield currencies improves, buoyed by receding worries over Dubai's debt problems and strong Asian equity prices.

Aussie eventually found traction as risk return, but found little support from the 0.25% rate rise

The pound steadied itself against the aussie after a sharp fall on Monday, edging slightly higher yesterday as markets speculated that the RBA may now slow its rate of tightening.

• Early on Tuesday morning, the Reserve Bank of Australia made their third rate rise in row, adding another 0.25% to the base rate, which now stands at 3.75%
  
• In lieu of the news the aussie did back off slightly against sterling, with the price briefly pushing back over 1.80, as investors anticipated that the RBA may now pause and wait for the economic data before they tighten monetary policy further.
  
• However the aussie was able trim losses as global equity markets climbed higher and gold prices hit a record high for the second straight day.
  
• In trading this morning, the aussie is moving higher, currently up over a half a cent, as fears ease over the impact of the Dubai debt crisis, increasing appetite for riskier assets.

Positive data and higher stocks enabled the single currency to consolidate over $1.50

A broadly weaker US dollar dropped 0.5% to the euro yesterday as positive talks in Dubai encouraged demand for higher-risk assets.

• The US dollar came under pressure as concerns eased about Dubai's debt-related problems, which supported a rebound in global equity markets, reducing haven demand.
  
• Leading European indices erased Monday's losses, gaining over 2.0% on the day. The US markets followed suit, opening the session with gains beyond 1% as fears from Dubai World's debt crisis waned with the UAE Central Bank offering financial support to troubled banks in the region.
  
• The dollar trimmed its losses slightly in the afternoon through after the US ISM Manufacturing PMI Index declined to 53.6 in November from 55.7 in October, a somewhat larger decline than the 55.0 expected by the analysts.
  
• The data did show that manufacturing activity continued to expand in November though, limiting the haven appeal.
  
• Markets will be watching an important US employment figure released today at 13:15, which is expected to show that 155,000 jobs were lost in November, a near 25% improvement on October.

As concerns over Dubai ease, the haven appeal of the USD is beginning to soften

The pound advanced against the dollar yesterday, up 1.0%, as UK house prices continued to rise and as concerns eased that a delay in Dubai's debt payments would hurt UK lenders.

• The pound snapped three days of losses against the US currency after Nationwide Building Society said the average cost of a home in the UK increased 0.5% in November. The data offset a larger than expected decline in the manufacturing sector.
  
• Meanwhile, Dubai World began negotiations to restructure about $26 billion in debt and said the remainder of its $59 billion of liabilities was on "a stable financial footing."
  
• Sterling managed to extend gains after US data showed the manufacturing sector grew in November, though at a slower pace, while pending home sales rose to a three and a half year high in October.
  
• US pending home sales rose 3.7% in October, against market expectations of a decline of about 0.6%, which shows that construction activity in the US might be about to come out of a long lasting slump. The greenback softened on the improved economic outlook.
  
• A strong showing in global equity prices also supported a move away from the US currency, with the FTSE up 2.3% and the Dow Jones also closing up well over one percent.

The pound edged higher against the euro yesterday, buoyed by strong equity prices

Sterling made up over half a cent on the single currency, erasing losses incurred at the beginning of the week, to close marginally above 1.10.

• In early trading, a Nationwide survey revealed that UK house prices are continuing rise, increasing by a further 0.5% in November, which boosted demand for the pound and offset weaker manufacturing PMI data.
  
• UK house prices have now risen for the seventh consecutive month, helped by better-than-expected news from the job market.
  
• The UK manufacturing purchasing managers' index fell to 51.8 in November, some way below both the market forecast of 54.0 and the previous month's revised figure of 53.4.
  
• Sterling came under pressure on the data, but analysts said that a general move towards risk as global equity markets surged, led to an appreciation of sterling.
  
• In addition, although the manufacturing figure was weaker-than-expected, it still shows that the industry is expanding, encouraging the consensus that the UK pulled out of recession this quarter.
  
• So far today the pound is trading slightly lower although the pair are likely to remain relatively range bound, hovering around 1.10, as there are no major economic announcements in either the eurozone or the UK.

Kiwi was higher in trading yesterday and is continuing to press higher against the pound this morning

The pound fell back sharply against the kiwi dollar yesterday, losing two and a half cents from a two-month high to close back below 2.30.

• The higher yielding kiwi dollar found support as risk appetite found its way back into the market after the UAE central bank agreed to provide support for the ailing Dubai banks.
  
• The kiwi rose some 1.1% as demand for the New Zealand currency strengthened and risk appetite found its way back in to the market following the encouraging news.
  
• Meanwhile, sterling was under heavy pressure in the wake of a weaker-than-expected consumer confidence survey, which highlighted the fragile state of the domestic economy.
  
• In trading this morning, the kiwi is climbing higher, up over a cent so far today, as news that Japan may expand quantitative easing as led investors to sell the Japanese yen in favour of the riskier New Zealand dollar.

The high-yielding aussie posted solid gains against the pound, supported by a return to risk

The aussie dollar trading strongly yesterday, advancing near 1.4% against a broadly weaker pound, as the UAE central bank eased concerns about the health of Dubai's financial sector.

• The news buoyed demand for riskier assets, which had come under pressure last week as Dubai's debt issues undermined confidence in the global economic recovery.
  
• Adversely, the pound came under heavy pressure during trading in the wake of a UK consumer confidence survey that showed the lowest rating in ten months.
  
• In the early hours of this morning, the aussie found renewed support after the Reserve Bank of Australia decided to raise their base interest rate by a further 0.25%.
  
• The aussie dollar has backed off slightly following the initial spike following the RBA's decision, as the upward rate movement was in line with market expectations and had already been priced in.
  
• Analysts now expect that the RBA may slow their rate of tightening, having raised rates for three straight months, which will enable other nations to close the yield gap.

A return to risk as concerns in Dubai eased enabled the euro to post gains against the US dollar

The single currency edged higher against the US dollar yesterday, supported by rising risk appetite as concerns over the banking sector in Dubai abated slightly.

• A pledge by the UAE central bank to provide support to Dubai banks quelled some concerns about the health of the area's economy, after Dubai's appeal late last week for more time to repay billions of dollars in debt repay debts shook confidence in global markets.
  
• The move to contain the fallout from the Dubai debt crisis, which last week sparked a surge in haven demand for both the dollar and the yen, boosted investor confidence and weighed on the US currency.
  
• The euro also found support after data revealed an upside surprise in the eurozone CPI inflation rate to 0.6%, having read -0.1% the previous month.
  
• In trading this morning, the euro has continued to press higher, already up over half cent as risk seeps back into the market following the welcoming news that UAE central bank has established emergency liquidity for local and foreign banks working in Dubai.

The pound headed lower aginst the USD yesterday, undermined by weak UK data, though it is recovering this morning

The pound fell to briefly test levels below $1.64 yesterday, under pressure following weak economic data from the UK and on falling stocks in Europe.

• The pound was little changed against the dollar in early trading, having actually risen earlier in the day on the view that Dubai may have avoided the worst of its debt-related problems, which prompted some demand for currencies considered to be higher risk.
  
• However, sterling began to slide back after the headline UK Gfk consumer confidence balance fell unexpectedly from -13 to -17, the sharpest monthly decline for 13 months.
  
• Separately, data showed the fourth consecutive fall in UK consumer credit. This is a trend that is likely to continue as households seek to pay back unsecured credit.
  
• The pound also came under pressure as European stock markets lost further ground, with major indices down over a cent by the close of play. Later in the day though, US equities did turn positive, which saw the dollar cap its gains.
  
• Currently the pound is pushing higher against the US dollar with European equities opening on a positive note.
  
• Investors are now awaiting important manufacturing data to be released today from both the UK and the US.

A weak UK confidence survey yesterday had sterling on the back foot

The pound extended its one-month low against the euro, dipping as low as 1.0925 as demand for the UK currency remained weak.

• Sterling slipped back half a percent on the day after an unexpected fall in British consumer confidence underlined ongoing weakness in the domestic economy.
  
• A monthly GfK survey showed its UK consumer confidence index fell to -17 in November from -13 in October, well below the market forecast.
  
• Analysts said overall demand for sterling may remain sluggish amid evidence which continues to show that the UK economy is struggling.
  
• There was some positive news for the markets though after the UAE central bank agreed to support the indebted Dubai banks.
  
• While analysts said that the financial issues in the hub of the Middle East may have subsided for now, some said sterling was unlikely to rise significantly in the near term as many in the market continue to bet that the UK economy will take longer to recover than other countries.
  
• In trading this morning the pair are holding steady around the overnight close price, although sterling could find slight support if the UK manufacturing PMI index, released at 09:30 shows improvement for November.