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The pound was under continued pressure yesterday, after comments from Bank of England Governor Mervyn King late on Wednesday night. While a “long, hard slog” may surmise how many people feel about getting through another Friday at work, this was how Mr King chose to describe the road to economic recovery for the UK.

Sterling also battled as European equities struggled; the FTSE was down 0.6%, dragged lower by banking stocks after a rumour spread like wildfire through European trading floors that Credit Agricole would be raising capital with a rights issue in the near future.

US data was hardly pleasing, initial jobless claims figures reminding the optimists to not start patting themselves on the back just yet, as the weekly reading unexpectedly rose by 15,000 to reveal a figure of 627,000 in total. However, a revision of the US GDP reading from a -5.7% annual decline to -5.5% helped spur US equities higher, and saw the dollar gain some strength as a result.

The threat of further Swiss National Bank (SNB) intervention against the euro saw it remain stagnant over the course of the day, a good result considering another disappointing data release from the single currency area, this time in the form of EU industrial orders

Japanese finance ministers’ affection for getting themselves involved in currency issues was once again proven true, as current minister Kaoru Yosano commented that he had faith in the US reserve currency status. The yen also weakened as fears about deflation continue to raise their ugly head. 

Today’s data is fairly light, US personal income & spending figures and Michigan consumer confidence are unlikely to move the markets much, so we will look towards equities and commodities to lead the market direction today

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