Sterling managed to brush off worse than expected PMI service sector data which dipped into contraction territory. Poor weather conditions in the run up to Christmas were seen as the main reason for the disappointing figure and with no UK data out, focus is likely to centre on the release of the US non farm payrolls report. The US dollar is trading close to four month highs against the euro in the run up to the release of non-farm payrolls data.

Sterling

The pound held up well against economic data released showing contraction in the service sector of the UK economy. The dip in the CIPS PMI service sector survey was exacerbated by poor weather conditions, which helped investors shrug off the weak reading. Cable has done a decent job of holding onto levels considering the strong declines seen in euro/dollar. As a result, sterling made strong gains against the euro and is trading near three week highs versus the single currency.

US Dollar

The US dollar continued its climb against the euro and is ready to now test levels last seen in November. The move in euro/dollar is being driven by renewed confidence of a turn around in the US labour market as well as by continued upheaval in European debt markets. The upheaval in debt markets continues to highlight weak investor confidence in the area.

Euro

Eurozone economic sentiment figures released bode well for Q4 growth data despite a weaker than expected release of retail sales data. German industrial orders figures surge in November by 5.2 per cent, which helped to lend support to an ailing euro. The euro continues to be haunted by weakened debt markets, despite the verbal support that was seen this week from China.

Japanese Yen

The Japanese yen is experiencing a period of consolidation and is trading in very tight ranges against most currencies.

Travelex Global Business Payments Malta, freephone: 800 733 22, www.travelex.com/mt/

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