Falls in the price of crude oil saw optimism that the worst of the downturn is over recede yesterday. Equity markets heavy in oil and other natural resource stocks fell heavily in early trade impacting risk and giving speculators the chance to sell out of risky positions.

As a result sterling fell to a 6 week low against the dollar of 1.6096 and to a 2 week low against the euro of 1.1570 or 0.8643 in EURGBP terms.

The news that the Bank of England is considering an extension to its quantitative easing program contributed to sterling’s decline. Any expansion of the public debt will see more pressure heaped on our already fragile credit rating with sterling the obvious victim.

Weak housing data from Europe allowed us some fight against the single currency and prevented us from losing more ground. It was published yesterday that house sales in the EU were worse in Q1 of 2009 than in Q4 of 2008; a feat that has not been repeated and shows how far behind the curve the EU is currently lagging.

It is once again a quiet day for data with only a couple of bits and bobs to be wary of. Industrial and manufacturing production numbers are due at 09.30 and given the increases we have seen in their respective PMIs recently we are looking for a figure of around 0.2%. German factory orders are also due at 11am with a 0.5% increase expected. All of these may be irrelevant however should commodity and equity markets continue to behave as they did yesterday.

World First’s Twitter page is up and running and we will be live ‘tweeting’ the impact of all these data releases and how they affect the markets. Click below for up-to-date news on all things currency. The address is http://twitter.com/World_First