Pound Sterling - UK markets

The pound climbed against the dollar again this morning by 1.8% as the cross jumped to USD1.639 from USD1.597 on the foreign exchange on Wednesday. Sterling also jumped against the euro sending the shared currency down 1.8% by yesterday's close.

This is the pound's first weekly gain in a month against the dollar amid optimism that the Bank of England will suspend the asset purchases program. The anticipated ceasing of the quantitive easing program in the coming months is likely to boost demand for sterling.

US Dollar - US Markets

The US currency fell to a near four-week low against the pound but climbed against the Japanese yen at the close of a volatile Thursday on the foreign exchange market. The dollar index traded at 75.47 yesterday, compared to 75.51 on Wednesday. This followed the release of mixed US economic data and the bleak dollar sentiment remains with the EUR/USD pair currently trading around USD1.49.

Today's release of the TIC long term purchases, the industrial production report and the prelim UoM consumer sentiment will provide great volatility to the US currency, possibly pushing the EUR/USD beyond the USD1.50 level.

Euro - European Markets

The euro slipped against the dollar on Thursday, despite speculation that the European Central Bank officials will signal the withdrawal of unconventional policy measures, boosting demand for higher-yielding assets.

With trade balance data being the only release expected from the eurozone today, the euro's position is likely to be affected by data releases coming from the US.

Other Currencies - Highlights

The Asian session was quiet in terms of significant data releases this morning. The Australian dollar reached a high of USD0.97, boosted by hawkish talk from RBA Governor Glenn Stevens who said that they cannot be “too timid” in raising rates. The Swiss franc currently stands at USD1.016 and 1.51 against the euro.

The Canadian dollar rallied against US currency yesterday and is slightly higher again today at USD1.034 whilst the yen continued its decline against the majors touching EUR136.03, its lowest level since August 24, it is currently trading at 135.5 against the euro.