During early European deals on Wednesday, the British pound jumped to new multi-day highs against its most major counterparts despite a fall in UK stocks.
Britain's top share index shed 1.8 percent in early trade today, pulled back by weakness in banks and commodity stocks.
At 4:55 am ET, the FTSE 100 index .FTSE was 72.71 points lower at 3,853.93, after jumping 163.23 points, or 4.3 percent, on Tuesday.
Investors were also reminded about domestic financial worries, with comments from Bank of England policymaker David Blanchflower who said the UK had yet to feel the pain of rising unemployment. Highlighting the vulnerability of Britain's economy, Blanchflower said unemployment could breach 3 million by the end of this year.
U.S. President Barack Obama met with U.K. Prime Minister Gordon Brown in London today before the G-20 summit as the global economy mired in its first recession since World War II.
Obama, who wants member-states to pump more money into programs aimed at kick-starting their respective flagging economies, is expected to present a raft of proposals, including increased oversight for hedge funds and more powers to deal with troubled financial firms deemed too big to fail.
UK's sterling that rose to a 5-day high of 142.71 against the Japanese yen during Wednesday's early Asian session, fell during the later part of the session. However, the sterling spiked higher in early European trading, and rose from 140.61 to 142.62 by about 4:40 am ET. This may be compared to Tuesday's New York session closing value of 141.81. If the sterling rises further, it may test support around the 144.6 level.
The BoJ Tankan survey released earlier today showed a record decline for large manufacturers index. Japanese sentiment among large manufacturers plummeted at a record rate in the first quarter of 2009, posting a diffusion index score of -58. That was worse than analyst expectations for -55 following a score of -24 in the previous quarter.
It was the sixth straight quarter of decline, and the fall of 34 points from the previous survey in December marked the largest fall on record.
The British pound rose against the dollar after showing weakness during Wednesday's Asian trading. The pound thus climbed from 1.4276 to 1.4386 by about 4:15 am ET. This set a 5-day high for the UK currency. The next upside target for the UK currency is seen at the 1.464 level. At yesterday's New York session close, the pair was quoted at 1.4325.
From US, the ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 am ET. The report is usually released two days prior to the Labor Department's employment report.
The results of the manufacturing survey of the Institute for Supply Management, which are based on data compiled from purchasing and supply executives nationwide, are due out at 10 am ET today. Economists expect the index to show a reading of 36 for March.
At the same time, the Commerce Department's construction spending report to be released and it is expected to show a 1.6% decline in spending for February.
Data on Pending Home Sales, which is a leading indicator of housing market activity released by the National Association of Realtors, is also due out at 10 am ET. The index is likely to show a 2% decline for February.
At about 4:45 am ET Wednesday, the UK currency hit a 1-week high of 1.6505 against the Swiss franc, and the next upside target level is seen at 1.66. The pound-franc pair closed Tuesday's deals at 1.6327.
The Swiss SVME Purchasing Managers' Index or PMI stagnated at a record low of 32.6 in March, a report from Credit Suisse said today. Economists had expected the reading to rise to 33 in March. The index has not posted a further fall for the first time in 15 months.
Against the European currency, the pound has been extending Wednesday's Asian session uptrend. The pound advanced to a 17-day high of 0.9158 by about 4:30 am ET, compared to 0.9254 hit late Tuesday in New York. On the upside, the British currency may likely find resistance near the 0.895 level.
Germany's Federal Statistical Office announced that the retail turnover in real terms dropped 5.3% year-over-year in February, after falling 1.4% in January. Economists were looking a decline of 1.2%. A year ago, retail turnover was up 3.6%.
On a monthly basis, retail turnover declined 0.2% in February, compared with a 0.9% fall in the previous month. Economists had predicted an increase of 0.3%.
For comments and feedback: contact email@example.com