The pound gained over 1% yesterday to reach a month high against the Australian dollar as the Queensland floods affected sentiment against the Australian dollar.
Against the euro, a generally quieter day in the markets with all eyes on the Portuguese bond auction later on this morning.
Data wise, UK economic performance continues to be a mixed bag.
The British Chambers of Commerce (BCC) have warned that Britain’s largest sector, services, remains fragile in its latest quarterly survey.
“While the indicators point to a strong manufacturing sector, performance in the service sector is weaker, raising concerns about a sustainable recovery,” the BCC said.
On a more positive note, accountants KPMG report in a new study that suggests the UK jobs market is “on the road to recovery”, with a strong rise in demand for staff.
The survey of recruitment consultants and employers in December found permanent staff vacancies rising at their fastest level in four months.
The euro has been trading slightly firmer over the past 24 hours after yesterday’s news that Japan would join China in purchasing European bonds as part of the European Financial Stability Fund (EFSF).
Nevertheless, all eyes will be on today’s bond auction and whether or not Portugal has to pay over the odds for between €750 million and €1.25 billion worth of 2014 and 2020 debt.
A debt sale due on Thursday by Spain will also be closely watched by investors.
Commentary by Tony Redondo, Senior Trader at Torfx.
“Any opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions.”
