Euro runs into weak data with Pound making good gains against USD

Tuesday’s trading saw further gains for the pound against its major pairs, hitting a near 10 month high against the Euro and the US Dollar. Data wise the Euro-zone experienced a raft of weaker figures mainly out of Germany with an increase in both their unemployment rate to 6.9% from 6.8% and with 25,000 more people being out of work in the last month compared to an expectation of a 5,000 reduction. Unemployment also rose in Italy to 12.2% whilst the overall Euro-zone figure remained at 12%, just avoiding a predicted increase. The only UK announcement was for Manufacturing PMI which had dropped slightly to 56.7 from 57.2 last month, but still showed a positive growth in this sector. Euro rates reached a potential short term peak yesterday hitting a key resistance level before dropping off slightly later in the day. It is widely expected that this resistance will hold therefore providing a great opportunity to secure your Euros that may be needed over the coming weeks and months. GBP/USD rates pushed on further following the recent news that with the US government failed to agree an extension to their debt ceiling deadline, but as the day’s trading day developed all of these gains were lost, particularly after the US Manufacturing PMI figures showed a better than expected growth figure, boosting the struggling dollar. Today see’s the release of UK PMI construction figures for September at 9:30am, a good figure could see a small rally back towards the resistance ceiling however the pound is somewhat vulnerable to any weaker data whilst it sits at these peak levels. Elsewhere The Euro-zone interest rate decision will be a weak earlier than usual at 12:45pm followed by the always eagerly awaiting press conference from President Draghi. The main dollar release today is the ADP employment change figure announced at 1:15pm.