Thu 2nd Dec: Majors rally despite data from US shows broad based growth

The Dollar crumbled to new lows against the single currency despite a slew of data releases showing improving signs in the economy and a downgrade of Eurozone growth estimates.
The pound surged to its highest level against the dollar since Black Wednesday, 16 September 1992, when the pound crashed out of the Exchange Rate Mechanism, the prototype for the euro, despite the Bank of England having spent £7bn of its reserves to support it.
Sterling rose 1.1 per cent to $1.9303 against the dollar, a two-day gain of 2 per cent, and jumped 1 per cent to Y198.33 against the yen, an eight-week high, 1 per cent to £0.6892 against the euro and 1.4 per cent to SFr2.2069 against the Swiss franc.
Yesterday saw the manufacturing ISM beat market estimates of 57.0 by rising to 57.8 and showing growth was broad based. Following this was the Fed's Beige book, which yet again reiterated a broad based improvement in the economy with manufacturing and services sector picking up and labor hiring also on the rise. The personal spending numbers also came out higher at 0.7 percent showing healthy signs for consumer behaviour in the US.
In the Eurozone although ECB downgraded its growth estimates for the region from previous 2.3 percent to 1.9 percent, traders seem unflinching in their goal of pushing the single currency higher, which hit a high of $1.3366 overnight.
A sharp fall in the oil prices as inventory numbers from US came out higher than expected and an upward revision from Saudi Arabia of its daily output helped the indices stage a smart rally yesterday with the NASDAQ and Dow rising by 1.9 and 1.65 percent respectively.
Yet another market defying PMI number from the UK at 55.0 and hawkish comments from the Bank of England governor Mervyn King regarding an improvement in the trade deficit due to a fall in the Sterling against the Euro helped the former to shoot up by yet another 2.5 cents to a high of $1.9334.