The pound gained across the board during the overnight trade after report showed that UK consumer confidence rose from record low in November. An index of consumer sentiment increased to 40 from 36 in October, which was the lowest reading since 2004, and a gauge of consumer expectations rose by 7 points to 55. However, the reading is below its long run average, indicating that consumers remain pressured and wary about future prospects. Looking ahead to today, CBI (Confederation of British Industry) reported sales headline the economic calendar, with the expectations for the December figure to improve from previous month but to remain subdued. Expect for the pound to remain supported should the CBI sales figures surprise on the upside.
The euro gained against the dollar during morning session after German business confidence unexpectedly rose in December. The Ifo institute business climate index rose to a three month high of 107.2 from 106.6 in November, suggesting the Eurozone’s largest economy is weathering the region’s debt crisis. However, single currency remains extremely volatile as EU governments struggle to come out with a lasting solution for the debt crisis, pushing up sovereign borrowing costs.
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