The Pound on Monday bowed to the currency's unwanted correlation to risk appetite. The Home track Housing survey for October reported home prices grew for a third time. More amazing was the CIPS/Market Manufacturing PMI survey for the same period. The factory sector grew at its fastest pace in nearly two years. This could affect BoE's rate decision this Thursday; it may also put a hold on increasing the bond purchasing program. Perhaps the MPC's economic and inflation forecasts could hold a brighter outlook than traders are currently forecasting.
The Dollar mainly unchanged from last week's lows. However manufacturing industry grew at the fastest pace in October since April 2006, according to the Institute for Supply Management. The ISM manufacturing index clocked in at 55.7, much better than the 53 economists had expected. It was the third month in a row the index came in above 50, which indicates growth. In recent trends Investors sell the dollar in favor of riskier, higher-yielding currencies and stocks when strong economic reports
The Euro Europe could join the few in leaving the recession when growth figures come out next month. However poor jobs and inflation data released Friday strongly suggest the euro-zone recovery will be slow and fragile.
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