httpvh://www.youtube.com/watch?v=yccwOC9sM-o

·         Strong housing and industrial production helps dollar higher

·         UK joblessness rises to highest since 1997

·         Bank of England voted unanimously to ‘pause’ quantitative easing

·         US Fed minutes show optimism for US economy, talk of asset sales

All this and more is available on our blog. Click here  http://www.worldfirst.com/blog

FX markets were messy yesterday. Strong data from the US guaranteed strong dollar movement even in the face of bullish equity shifts while UK focused releases painted a mixed picture.

Both US new housing starts and industrial production beat consensus thoughts for their January measures. The Fed minutes were also bullish for the greenback as policymakers debated the time frame for an ‘exit strategy’ and asset sales; a show of confidence in the US economy. This came in the face of strong equity market moves higher as sovereign debt fears receded. Concerns were tempered after Portugal managed a bond sale with very little fanfare with a decent cover ratio; an indication that the Greek contagion has been kept at bay so far.

News from the UK was mixed however as BoE bullishness was countered by an unexpected decline in the jobs market.

Mervyn and friends voted unanimously to ‘pause’ QE at current levels with the minutes reinforcing the views laid out in this month’s inflation report i.e. that the recovery will take some time, that QE may need to be restarted if growth isn’t forthcoming and that inflation should  recede closer to target by the end of the year. No real surprise there then, the surprise instead came in the unemployment data.

The number of people out of work and claiming Jobseeker’s Allowance in the UK rose by 23,500 in January against expectations of a 10,000 person fall. Long-term employment also rose unexpectedly to a level not seen since 1997. This had traders nervous as it casts doubt on the strength of the UK recovery.

We get further news on the state of the UK economy today with our PSNB. PSNB is a measure of the amount of new debt held by the U.K. government. If the PSNB is negative it shows that the government’s accounts are in surplus and if positive that they are in deficit. A surplus is seen as beneficial for an economy and currency and therefore a negative PSNB is ideal. It is predicted at -£2.8bn.

Other data includes US PPI (13.30) and Philly Fed Manufacturing (15.30).