The stock market then stabilized and actually started to gain as rumours swept the market of a new Chinese stimulus package. On the same subject Chinese PMI increased to 49 from 45 last month and added to speculation China may rebound from the current slowdown. US January Non-Manufacturing for February came in at 41.6 vs. 42.9 previously.
February ADP National Employment at -697K vs. -522K previously. The ISM survey figure expressed a continued lack of confidence in the economy by stateside purchasing and supply executives.
The euro took out large stops under 1.25 to hit new 3 month lows before the china story took hold dragging the pair higher with global stocks recovering from 12 year lows. February PMI was revised slightly higher to 39.2 from 38.9.
Overall the EUR/USD traded with a low of 1.2459 and a high of 1.2663. Looking ahead, German Retail Prices predicted at +0.2% in January, the main news today is the ECB Rate announcement forecast to cut 0.5% from 2.0% to 1.5%.
Sterling once again bounced off the 1.400 level as USD was at maximum strength in Asia before rebounding sharply to 1.4200 on GBP/JPY buying. Overall the GBP/USD traded with a low of 1.3987 and a high of 1.4198 before closing the day at 1.4140 in the New York session.Uk PMI service figures showed their 3rd monthly increase since coming off November's record lows.
This is the best outlook for the coming year for the last 5 months showing that service providers may see some light at the end of the tunnel. Looking ahead the Bank of England is expected to cut interest rates by 0.5% from 1% to 0.5%.