During Friday's early European deals, the pound reversed its late Asian session's loss against other major currencies as the UK stocks climbed above 4000 mark for the first time in six weeks. The pound thus climbed to a new multi-month high against the yen and new multi-week highs against the dollar, franc and the euro.
The benchmark FTSE 100 Index added 98.80, or 2.5 percent, to 4,054.41 at 9:38 a.m. in London, climbing for a third day.
Yesterday, the pound made strong gains amid a report by Nationwide Building Society that the U.K. house prices posted a surprise increase in March for the first time since October 2007.
Contrastingly today a report from HBOS showed that the UK house prices decline in March. UK's Halifax house price index dropped 1.9% month-on-month in March, lower than February's 2.3% fall, a report from HBOS showed Friday. Economists had expected a monthly fall of 1.8% in March.
The pound pulled back against the Japanese yen after showing strength during Friday's early Asian trading. But the pound rebounded in early European session and hit a new multi-month high of 148.39 by about 4:40 am ET, compared to 146.60 hit late Thursday in New York. On the upside, the UK currency may likely target the 151.8 level against the yen.
The sterling strengthened to a new multi-week high of 1.4831 against the dollar by about 4:35 am ET, after falling to 1.4653 by about 2:30 am ET. If the pound rises further, 1.49 is seen as the next likely support level. The pound-dollar pair was worth 1.4727 at Thursday's New York session close.
Across the Atlantic, investors are keenly awaiting the US non farm payrolls report that is scheduled to be released at 8:30 am ET. Economists expect the report to show 660,000 job losses in March from 651,000 jobs lost in the previous month.
At 10:00 am ET, the U.S. Institute for Supply Management will release its non-manufacturing report for March. The index is expected to improve marginally to 42.0 in March from 41.6 in February.
Also, Fed Chairman Ben Bernanke will speak in Charlotte, North Carolina at 12:00 pm ET, just after Federal Reserve Vice-Chairman Donald Kohn speaks in Wooster, Ohio.
Against the euro, the pound eased after showing strength during Asian trading. But the UK currency recouped its losses during early European deals and is now trading at a 25-day high of 0.9086. On the upside, the next likely resistance level is seen at 0.89 for the pound. The pair closed yesterday's deals at 0.9145.
Germany's Federal Statistical Office said in a report that the import price index declined 6.4% year-over-year in February, after falling 5.4% in January. This was the biggest price decline since 1999, when prices fell 6.6%. A year ago, prices were up 4.8%.
At about 2:25 am ET, the pound strengthened to an 18-day high of 1.6813 against the Swiss franc, moving from its early low of 1.6669. The UK currency may test resistance near the 1.70 level, if it ticks up further. At yesterday's North American session close, the pound-franc pair that was worth 1.6704.
In economic news from Switzerland, the Federal Statistical Office said Swiss consumer prices declined 0.4% in March from the previous year, faster than 0.1% fall expected by economists. In February, consumer prices grew 0.2%.
Month-on-month, consumer prices were down 0.3% in March, while economists expected prices to stay stable.
For comments and feedback: contact firstname.lastname@example.org