UK

Risk aversion continues with momentum. The Pound has extended its decline against the Dollar and recently fell below 1.5600 for the first time since May of 2009. The pair is falling sharply for the third consecutive day accumulating a decline of more than 400 pips.

The United Kingdom’s manufacturing sector is heating up at a faster rate than forecast by the market, according to the producer price indexes released today by the UK national statistics office.

The PPI input, which captures changes in the average price of a fixed basket of goods and services purchased by the UK Manufactures, rose by 2.0% in January from 0.1% the previous month. Analysts had predicted a much more modest increase of 0.2%. In yearly terms, the PPI input jumped to 8.4% in January, above forecasts of 6.5%, from 6.9% in December.

EUR

EUR/USD has fallen below 1.3600 to 1.3592 reaching the lowest price in 8 month. The Euro continues under pressure as risk aversion remains intact. EUR/JPY fell to fresh 11-month lows.

Stocks, gold and crude oil are falling to fresh lows and the Dollar and the Yen are gaining momentum. EUR/USD is plunging for the third consecutive day accumulating a decline of 370 pips
 
The selling spree continues dominating European markets, which have opened Friday’s session on weak note as concerns about debt problems on Greece Portugal and Spain continue spooking investors. Euro and Pound remain weak, hovering at multi-month lows.
 
USD

The dollar hit a seven-month high against a basket of currencies on Friday, as rising investor risk aversion on concerns over fiscal problems in some euro zone countries lifted the appeal of the safe-haven currency.
The US labor market gave mixed signals in January with nonfarm payrolls falling once again versus hopes of modest gains while the unemployment rate unexpectedly fell.

The nonfarm payrolls shed 20,000 jobs in January versus forecasts which had called for 15,000 new jobs to be added.

Even more sobering are the nonfarm payrolls for December that were downwardly revised to -150,000 jobs destroyed from the 85,000 jobs lost originally reported.

In some positive news from the nonfarm payroll front, the modest 4,000 jobs created in November were revised upwards to 64,000, making November 2009 the only month of job creation the US has seen since December 2007.

The unemployment rate, however, unexpectedly fell to 9.7%, its lowest level since August of last year, from 10.0 in December. This result betters market expectations that the rate would remain unchanged.

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