During early European deals on Friday, the pound jumped to new multi-day highs against its major counterparts as U.K. stocks rose for a second day today, tracking strong gains in U.S. and Asian markets overnight, with financials higher on enhanced hopes U.S. banks will survive without nationalization. At 5:05 am ET, the FTSE 100 index. FTSE was 61.14 points higher at 3,773.20, after closing up 18.25 points, or 0.5 percent in the previous session. Comments from the Chinese Premier Wen Jiabao that his Government is ready to unveil another stimulus package for reviving the economy and reports that Government officials in Tokyo are contemplating new stimulus package to support the world's second largest economy added to the buoyancy. Oversold conditions in the markets also helped the broad rally, which saw the Nikkei gain over 5%, while markets in Hong Kong, Singapore, Australia and Taiwan gained 3% or more each. The U.K.'s benchmark index has climbed 6.9 percent in the last five days, snapping four weeks of losses, as Bank of America joined JPMorgan Chase & Co. and Citigroup Inc. in saying it made money during the first two months of 2009. Bank of England policymaker Kate Barker said Britain's economy looks like it will shrink even faster than the central bank forecast only last month, but the recovery could be sharp, forcing a swift unwinding of stimulus. "Although the timing of the impact on the economy remains uncertain, there are a range of potential effects which I will be looking at closely over the coming months to gauge the impact of the MPC's actions," Barker stated. The pound, which closed yesterday's trading at 1.3941 against the dollar rose to a 4-day high of 1.4072 during early deals on Friday. The next upside target level for the pound-dollar pair is seen at 1.430. In early trading on Friday, the pound climbed to a 4-day high of 138.42 against the yen. This may be compared to Thursday's closing value of 136.24. On the upside, 141.5 is seen as the next target level for the UK currency. The yen plunged as Japan's industrial production declined 10.2% in January from the previous month, revised down from a 10% fall estimated initially. Year-on-year, decline in production was 31%. Meanwhile, Japanese household consumer confidence improved to 26.7 in February from 26.4 recorded in the prior month, a survey from the Economic and Social Research Institute showed. The indicator stood above the expected reading of 26.5. Against the Swiss franc, the pound jumped to an 8-day high of 1.6687 in early trading on Friday. If the pound-franc pair gains further, resistance is seen around the 1.677 level. At yesterday's close, the pair was quoted at 1.6530. Swiss producer and import prices dropped 0.6% in February from the previous month, larger than an expected fall of 0.2%, the Federal Statistical Office said today. From the previous year, import and producer prices were down 1.8%. Economists were looking for an annual 1.2% decrease. The statistical office said producer prices recorded 0.7% monthly fall and annual 0.1% decline in February. Meanwhile, import prices slid 0.5% month-on-month and dropped 5% annually. The Swiss Franc remained under heavy selling pressure after the Swiss National Bank said yesterday it began buying foreign currencies in its first solo intervention in foreign-exchange markets since 1992. The Swiss National Bank also aimed to weaken the Swiss franc to fight the risk of deflation as the country faces the worst recession in 30 years. Although the SNB has not defined a critical exchange rate level in its monetary policy strategy, officials frequently highlight the role the franc plays for the export-dependent economy. Citing sharp economic deterioration and a risk of deflation, the Swiss central bank lowered its key interest rate near to zero and narrowed the target range for three-month Libor by 25 basis points to a range of 0% to 0.75%. The SNB said it would use "all means at its disposal" to bring the Libor rate down to the lower end of the range at approximately 0.25%. During early deals on Friday, the pound advanced against the euro. The euro-pound pair that closed yesterday's trading at 0.9269 is currently worth 0.9170. This set a 3-day high for the UK currency. If the pound strengthens further, the next likely target level is seen at 0.90. Germany's Federal Statistical Office announced today that the wholesale price index or WPI declined 5.7% year-over-year in February, after falling 5.9% in January. On a monthly basis, the WPI dropped 0.1% in February, compared with a 0.4% fall in the previous month The Eurostat announced that Euro zone retail sales rose 0.1% month-on-month in January, after falling a revised 0.3% in December. Economists' were looking for an increase of 0.2%. On an annual basis, retail sales dropped 2.2% year-over-year in January, compared with a revised 2.4% fall in the previous month. Economists' had expected a decline of 2.3%. Traders are now likely to focus on the North American session, in which the US January trade balance, import and export price index for February and the University of Michigan's preliminary consumer sentiment report for March have been slated for release. Elsewhere, investors also await the outcome of a meeting of Group of 20 financial leaders in England this weekend, where they will discuss how to fight the global economic crisis.

Source