·         UK employment improves as claimant count falls

·         Greek fears continues to weaken euro

·         Bank of England voted unanimously to hold rates at 0.5%

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

Political intrigue in the US and a continuing recovery in the UK jobs market were the main themes in currency markets as the dollar and pound kept up their recent strength against the beleaguered euro.

President Obama’s Democratic Party lost their super-majority in the US senate in what is being called a protest vote against government spending. The success of the opposition candidate will make passage of the vastly expensive health care bill which Obama has pinned his presidency to more difficult. Non-passage would actually benefit the US dollar as it is one less expense that increases the already enormous budget deficit. The dollar rose 0.5 per cent to $1.6288 against the pound and gained 1.25 per cent to €1.4106 against the Euro.

UK news just keeps getting better. Normally the last economic indicators to turn positive after a downturn are those that relate to employment. This is because companies tend to only feel comfortable to employ new staff once a period of sales growth or stability has returned to the business. Jobless Claims here in the UK saw 15,000 people less people claim benefits in December than in November, 11,000 more than expected. The broader ILO unemployment rate also fell to 7.8% from 7.9% in November. This has kept sterling as a short-term ‘outperformer’ with highs against the euro yesterday of 1.1560.

The other major piece of data from yesterday was the Bank of England minutes from the January meeting. It was a unanimous 9-0 vote to keep interest rates at 0.5% and QE on hold until after next month’s Inflation report (due Feb 3^rd)

Data today consists of quite a bit from the eurozone which could arrest this euro decline (euro seems to be like a Liverpool FC cup at the moment; it keeps slipping down the table) poor –Ed. We have European PMI figures  at 09.00, with the German equivalent at 08.30. BBA mortgage approvals are also seen as a possible week link for the pound; they’re due at 09.30. We also have US jobless claims at 13.30 and Philly Fed at 15.00

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