POUND
UK unemployment data out yesterday did little to significantly move sterling despite the unemployment rate being the highest since 1994. Economists are commenting on the fact sluggish UK data could put pressure on sterling in the coming weeks especially if the spotlight is placed more on the UK. In the most recent data for the UK nationwide consumer confidence data out last night was weaker than expected at 38 against a forecast of 41. There is no further UK economic data due today.
EURO
The euro is trading slightly stronger against the pound and USD this morning after reports that the International Monetary Fund (IMF) was proposing to boost lending resources to help safeguard the global economy against the worsening euro zone debt crisis, aiding riskier currencies and especially the Euro. This is seen as a way of stabilising the debt situation whilst the European banking sector is showing more positive signs, but is by no means a done deal in terms of the IMF providing the money. The euro has also been boosted by the credit rating agency Fitch who said the ratings agency did not expect Italy to default. There is no further Euro zone data due until tomorrow.
US DOLLAR
The USD has lost a small amount of ground to the pound and euro this morning after some confidence and appetite for risk has returned to the financial markets. US economic data was mixed yesterday with US PPI inflation data showing falls to 4.8% from 5.7% in December while weekly retail sales showed some easing. This weaker data was in contrast to later numbers which highlighted US capital inflows rose to $48.6billion while industrial output increased to 0.4% from –0.3% in December. There is a raft of economic data due this afternoon including building permits, Core CPI, unemployment claims, housing starts and manufacturing data.
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