Pound advanced against a broadly weaker euro yesterday, but has stumbled in trading this morning

Sterling climbed half a cent against the single currency yesterday, helped by a weaker euro, which was undermined by comments from an EU official.

• In early trading, the pound was able to brush off an unexpected fall in the UK Manufacturing industry, which contracted to 49.5 in September, from 49.7 in August, against the market expectations of an increase to 50.3.
  
• The pound then gained against a broadly weakened single currency as European officials expressed discomfort over the euro’s recent rise in value.
  
• A top European official announced that he would discuss the EU’s concern over the recent appreciation of the euro at the G7 meeting this weekend.
  
• The single currency was further undermined as data revealed a rise in eurozone unemployment to a ten year high of 9.6%, which raised concerns over the health of the economic recovery in the region.
  
• A Nationwide housing survey has revealed that UK house prices rose by 0.9% in September compared with August, the fifth consecutive monthly increase, but the data has gone relatively unnoticed with pound currently down in morning trading.