European markets open the year on bid tone; Euro and Pound bounce up

 @ibtimes
on January 04 2010 5:11 AM

FXstreet.com (Barcelona) - European markets continue trading on a bid tone, extending past year's rally to a fresh 12-month high on Monday supported by oil prices, which have broken the $80 barrier, Euro and Pound are soaring on European trade after a choppy Asian session.

Eurostoxx 50 Index advances 0.85%, the same increase is registered at the German DAX Index, 0.83%, while the French CAC Index rises around 1.0%. In the UK the FTSE Index rises 0.45%.

On the macroeconomic front Eurozone manufacturing PMI has risen from to 51.6 in December from 51.2 in November, with German PMI rising to 52.7 in December from 52.4 in November, while UK manufacturing PMI rose to 54.1 in December from 51.8 in November, against markets expectations of a slight decline to levels around 51.5.

Still in the UK, the Bank of England has confirmed an increase on lending to households to GBP1.083 million in November from GBP508 million in October, beating experts forecasts of GBP500 million, with mortgage lending increasing to GBP1.459 billion from GBP1.01 billion in October.

Euro and Pound bounce strongly

EUR/USD Euro Dollar decline from 1.4440 high on December 31 has found support at 1.4255, and the pair has bounced strongly on European session to reach session high levels at 1.4395, supported by upbeat PMI figures.

GBP/USD bounced up during Asian session at 1.6055 low and following recovery has extended about 150 pips higher, to reach intra-day high at 1.6213 after unexpected advances on UK manufacturing PMI and Mortgage lending.

USD/JPY attempted to extend its rally from 84.80 low on late November, to levels above 93.00 and the pair reached a fresh 4-month high at 93.20 before pulling back to levels around session low at 92.70.

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