Euro on a rally but why?

Today's Highlights

• Sterling knocked by Industrial Production fall

• Euro on a rally but why?

• US Fed Chairwoman - pessimistic about global economy

FX Market Overview

Poor UK Industrial Production data surprised the markets yesterday. We were expecting a small scale improvement and we got a larger scale deterioration as overseas markets slowed and manufacturers adjusted accordingly. Sterling had a very bumpy ride as you might expect.

The US Dollar weakened yesterday after Fed Chairwoman, Janet Yellen offered a pessimistic view of the global and US economies. I suspect, if she could have a 'do over' as they say in America, she would not have raised interest rates in December and the chance of further rate hikes seems as likely as Jeremy Hunt being voted NHS man of the year. The markets are getting gloomier by the day as traders try to determine whether there is another slowdown or even a recession in the wind.

We started the day with the Euro being bought but no one seems to know why that is happening. It could be a delayed response to Janet Yellen's rather dovish testimony yesterday or it could be a sizeable M&A action which has not yet been announced. Either way, the market has seen the Sterling – Euro exchange rate fall by 2.5 cents this morning and the Euro – US Dollar rate rise by a similar amount.

This movement is even more surprising when you consider how little data we are expecting today. Janet Yellen will repeat her testimony when she attends the Senate banking committee. There is a chance we will get more detail but that is unlikely. We will get the US weekly jobless claims but they have long since stopped moving the market significantly unless the number is vastly different to the forecasts.

So the rest of the day will be lacking in news reports but may well be volatile as US traders arrive at their desks to see what Europe has been up to while they slept.

And in other news, comedians will all have a story about the moment they 'died' on stage. Something didn't work; the audience just didn't get them etc. One comedian has a film of his worst moment. The unnamed comedian in a clip, which is whipping around the internet, takes a knee and asks his girlfriend to marry him on stage in front of a live audience. But...and I know you knew this was coming ... she says NO and after a short tense conversation, she leaves the stage. At that point he turns to the audience and says ‘Um, I guess I’ll just do some jokes.’ This is either awkward humour or a very awkward real life moment but it is definitely tense.