UK pound is making a fairly strong showing today, particularly against the US dollar, as better than expected economic data helps the sterling.
The latest UK manufacturing PMI data shows an improvement to 51.4. This beats any forecast, and is providing the basis for a bit of a rally for the pound against the US dollar. Also helping the sterling on the Forex market is the fact that risk appetite has made an appearance.
Half of a fiscal cliff deal has been agreed to by US politicians, and that is helping the situation for high beta currencies like the pound. A surge in stock markets is also supporting risk appetite and helping the sterling.
There are still some hurdles for the pound to clear in the coming year, however. Bank of England policymakers are still involved in a balancing act, and there are concerns that continued austerity measures will offset attempts to stimulate economic growth. But, for now, there is optimism for currencies like the pound, and the latest economic data indicates that — maybe — the worst is over.
At 15:38 GMT GBP/USD is up to 1.3256 from the open at 1.3205. EUR/GBP is a little bit higher at 0.8134 from the open at 0.8127. GBP/JPY is up to 142.0415 from the open at 140.8650.
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