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Sterling Rallies As 2014 Starts, Manufacturing Data Watched

ByActionForex
Published 01/02/2014, 12:41 AM
Updated 03/09/2019, 08:30 AM

The Dow had a strong close last year making new record high at 16575.55 while the S&P 500 also closed at record 1848.36. Meanwhile, it should also be noted that treasury yields in US also made a strong close with 10 year yield at 3.026% and 30 year yield at 3.964% both new highs. But positive sentiments didn't follow through to Asian session today. Major indices are mildly pressured following disappointment from China's manufacturing data. Japan and China are still on holiday. In the currency markets, Sterling is leading the way in rally against dollar, comparing with other major currencies. The GBP/USD extends recent rally and reaches as high as 1.6591 so far. The EUR/GBP also dips further to as low as 0.8285, extending recent decline fro 0.8446. Some more volatility could be seen in the pound with PMI manufacturing featured in UK today.

China's manufacturing PMI slipped -0.4 point to 51 in December due to seasonal factors. The market had anticipated a milder drop to 51.2. On average, the reading came in at an average of 51.3 in 4Q13, 0.5 point higher than a quarter ago. The non-manufacturing PMI of October and November accelerated to an average of 56.2 from 54.8 in 3Q13, suggesting that the service sector has improved faster than the manufacturing sector.

Manufacturing data will be the main focus today. The Italian PMI manufacturing is expected to climb to 51.7 in December. The Eurozone will release December PMI manufacturing final. UK PMI manufacturing will catch most attention in the European session and is expected to drop slightly to 58.2 in December. The US will also release ISM manufacturing which is expected to dropped to 56.9 in December. The US will also release initial jobless claims and construction spending.

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