Tuesday, 4 Jan 2011

Sterling Makes Gains in Morning Trading

The UK pound saw significant gains during the morning trading session, following a better than expected British Manufacturing PMI. Both the GBP/USD and GBP/JPY pairs shot up well over 100 pips following the news, while against the euro the pound gained some 60 pips.

Turning to the afternoon session, traders will want to pay close attention to the US FOMC Meeting Minutes, set to be released at 19:00 GMT. Should the meeting minutes reflect the growing optimism regarding the employment situation in the US, the safe-haven yen and dollar may take further losses as investors continue to turn to riskier assests. In particular, the EUR/USD is likely to remain above 1.3400, and may test the 1.3450 resistance level.