W have had the UK purchasing Managers Index this morning, which came out higher than expected. This has helped the pound rise to a 2 high against the Yen this morning, and has also been supported against the US Dollar - more evidence that the global economy has helped increase risk appetite for higher-yielding currencies. The pound to Euro rates have also broken through 1.12.
Trading will be very light today, as the European markets are closed due to the Labour Day holidays. UK financial markets are open today, but will shut on Monday for a public holiday - as will this blog!
In EU news, unemployment 20 million in March. Unemployment in the countries using the euro is at its highest level since 2005, according to the region's official statistics agency. In March an estimated 419,000 people lost their jobs across the 16 countries in the eurozone.
This of course has weakened the Euro, and as I have predicted all week, we have seen rates rise to 1.12. In Germany, which is the biggest economy in the EU, The government have said that the country's economy will shrink 6% this year, in a dramatic revision to its earlier forecast of a 2.25% decline.
It would be by far the worst post-war performance of the German economy, as the biggest previous decline was 0.8% in 1993, just after re-unification.The German government says the country's economy will shrink 6% this year, in a dramatic revision to its earlier forecast of a 2.25% decline. Again, good news for Euro buyers as the currency will become cheaper.
Elsewhere, we only really have some US data this afternoon which may affect dollar rates. We have factory orders, and also the Manufacturing Index shows business conditions in the US manufacturing sector. It is a significant indicator of the overall economic condition in US.
This blog won't be updated on Bank Holiday Monday, so enjoy the bank holiday weekend, and we look forward to welcoming you back on Tuesday.
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