EuroZone upbeat on positive economic data

The Euro today declined from the high of 1.4440 which was made on December 31, 2009, to take a rebound beyond 1.4335, last seen around 1.4350, as fresh Manufacturing data lent confidence that the Euro Zone economy was upbeat. The Euro Zone manufacturing PMI rose slightly to 51.6 in December compared to the previous month, while German PMI rose to 52.7 compared to 52.4 for the same period.

Both the Euro and the pound saw a huge jump of 70-100 pips in the early European trade today. The Pound had earlier rallied to peak at 1.6235 on the last day of the previous year, correcting this year so far, to below 1.6070, against the dollar.

The Pound has also jumped as the PMI (manufacturing) and household lending data provided a positive sentiment to the currency markets. The Pound benefitted as the PMI jumped to 54.1 in December compared to 51.8 in the previous month, when the market expected a decline. Furthermore, the BoE suggested a sharp increase in housing lending to over £1 billion compared to nearly half that amount in the previous month.