Sterling up on dollar but down against euro after mixed economic UK data

US Dollar:

The dollar saw Monday’s losses against sterling come to a halt in the early hours of the morning as sterling failed to find direction after UK economic data made the pound lose ground. In Asian trade we did see support for the pound and euro as Asian markets rose, favoured by signs of steady economic recovery which saw the Nikkei rise to a nine-month high. This saw the dollar and yen sold off to the benefit of the higher yielding curren¬cies such as the single currency and sterling. In other news, Fed’s Fisher (voting hawk) thinks the US economy has enough forward momentum and reiterated that he would vote against additional monetary easing after QE2.US cons credit increased by US$6.1bn in December more than expected. , .
No major data. Speaker 18.00: FOMC Member Fisher.

Pound

Sterling has had to digest mixed economic data in the early hours of this morning and started the trading day in somewhat of a uncertain direction. Yesterday did see the pound make gains across the board as we broke the 1.19 level against the euro and closed in on the $1.62 handle against the dollar, but UK data released just after midnight saw the pound fall. On a positive note, shoppers marched back to the high street in January as better weather helped retail sales post their strongest performance in 10 months, but house prices did not enjoy the same boost as the freeze ended, surveys showed. Data from the BRC showed retails sales like for like rose 2.3% y/y and an improvement on the 0.3% fall in snow struck December. In contrast, the monthly sur¬vey from RICS found house prices kept falling, as the market stayed sluggish and new stock was in short sup¬ply. Sterling has taken a turn south against the euro on this confused UK data, giving up half a cent to see GBP/ EUR fall to 1.1850. Where the pound did find some support came overnight in Asia where risk appetite re¬mained, leading to global stock markets performing well to the determent of the dollar and yen. Players bought the euro and pound, (hence why GBP/EUR did not rally as buying of both currencies cancelled moves out against each other), and sold the dollar. Sterling has now put half a cent on the dollar overnight as cable traded close to the $1.6150 level.
No major data.

Euro:

A poor start to the week for the euro saw losses posted yesterday, but support for the single currency was seen overnight in Asian trade as risk appetite continued in global equity markets, leading to players selling the lower yielding currencies and purchasing the euro. This saw a cent gained for EUR/USD as the currency pair broke the $1.36 handle to hit $1.3640 this morning. There was not so much of a move against sterling, as the pound also benefitted from risk appetite and buying into the UK currency. The euro did manage to take 0.5% off the pound to see EUR/GBP0.8450.
Data already out: French Trade Balance came in at –5.1B, worse than –4.1B expected.

General:

• UBS has posted a net profit of 7.2bn Swiss francs for 2010—its first full year profit since the financial crises. It compares with a loss of 2.7bn francs in 2009.
• Crude oil prices were mixed in Asian trade today as easing fears of violence over Egypt’s political crises reduced the risk of a supply disruption through the Suez Canal, analysts said.

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