Broader market sentiment has turned positive, which traditionally helps lift the euro. However, the euro is facing some selling pressure in front of PMI figures. Sentiment began to shift when the National Transition Council made its way through Tripoli, bringing the war in Libya one step closer to a finish. Oil prices began to ease and equity markets were lifted. Chinese PMI data in the overnight session improved over the prior month and while it still reflects slowing global growth, the outlook for a hard landing in China looks remote. That has helped lift equity markets and alongside them the desire to put on more risk, which is to the advantage of commodity currencies and Scandies.

Sterling

The CBI industrial trends survey is due out and it could help provide momentum for sterling. Sterling traded in smaller ranges and could face some selling pressure alongside euro weakness against the dollar.

US dollar

With very little on the data or event risk calendar most market participants decided to watch developments in Libya. The progress that the NTC made in Tripoli prompted oil traders to lower the price of crude and gave way to improved sentiment in equity markets. The change in sentiment in equity markets helped sway currency markets, which pushed the US dollar lower.

Euro

Euro gains were stopped short as investors began to look towards the economic agenda. Flash estimates of PMI surveys for the manufacturing and service sector are due out. The manufacturing survey is forecast to show growth contracting. Talk of slower growth in the euro area alongside continued negotiations over the size and wider role of the EFSF, particularly in Germany, have limited the euro’s upside.

Japanese yen

There are reports that the embattled Japanese Prime Minister could step down as early as the end of this month. The news comes on the back of talk that the Central Bank could come up with ways to loosen policy further in an attempt to stem the rise of the yen.

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

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