The pound is higher against the dollar and the euro before December construction report is released today at 9:30. The PMI gauge is expected to consolidated to 51.5 from 52.3 in November, but still remaining above 50 benchmark. Separately, Bank of England publishes its landing data for November, with expectations for net consumer credit of 0.2 billion pounds, and mortgage lending of 0.8 billion pounds. Expect for the sterling to remain in current levels as markets remains driven by the events in the Eurozone.
The euro gained against the dollar during the overnight session, but stays under pressure against the pound as services and manufacturing reports showed that single region economy contracted for the fourth month in December. The PMI services final reading was better than economist forecasted at 48.8 from 48.3 in November, however any reading below 50 mark indicates contraction in the sector. The euro also came under pressure against sterling as Germany and Portugal prepare to auction 6 billion euro in debt. The single currency though found some support yesterday after EFSF (European Financial Stability Facility) announced it plans to raise 3 billion euros from bond auction to help finance bailouts in Ireland and Portugal.
The dollar consolidated during the Asian session after report showed that US manufacturing gauge expanded in December at the fastest pace in six months. The ISM (Institute for Supply Management) factory index climbed to 53.9 in December from 52.7 in November. The greenback snapped its gaining streak from 2011 as latest reports suggest that economies around the globe show some life signs at the start of the year. Federal Reserve Minutes released yesterday revealed that the central bank officials will start announcing their own predictions for the bank’s interest rate in the future.
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