By Kenny Fisher
It's been a holiday full of cheer and good tidings for the British pound, which has jumped over two cents against the dollar since Christmas Day. In Thursday's European session, GBP/USD is trading in the mid-1.65 range. Taking a look at economic releases, UK Manufacturing PMI dropped in November and fell short of the estimate. In the US, there are two key events on today's schedule - Unemployment Claims and ISM Manufacturing PMI.
British Manufacturing PMI dropped to 57.3 points in November, down from 58.4 in the previous release. The markets had expected a slightly better result, with the estimate standing at 58.3 points.
US consumer confidence is on the rise, as CB Consumer Confidence soared to 78.1 points, up from 70.4 a month earlier. This easily beat the estimate of 76.5 points. Consumer confidence is a closely watched event, as a stronger reading usually translates into increased consumer confidence, which is critical for economic growth. On Monday, US Pending Home Sales did not impress, gaining just 0.2% in November. This was well short of the forecast of 1.1%. However, the modest gain broke a string of five straight declines, so perhaps the key indicator has turned the corner on its recent downward spiral. Last week's housing data looked much stronger, as New Home Sales beat the forecast.
A quiet holiday week didn't stop the pound from posting gains against the US dollar. Low liquidity over a holiday period can lead to strong currency movements, and we got a taste of that on Friday. The pound shot up about 160 points before retracting to lower levels. As well, the recent Fed taper decision has fuelled a "risk on" atmosphere which has led to increased selling of the safe-haven US dollar and boosted the pound. With thin trade expected to continue until after New Year's Day, we
