The pound euro rate has not moved considerably, however the pound dollar exchange rate is higher as the safe-haven US dollar has sold off broadly in the current environment. "The GBP has been lifted with the broader risk-positive tone this morning, and a stronger than expected UK manufacturing PMI print has added further wind to sterling’s sails. The 40-day moving average (currently near 1.5640) should provide resistance for GBP/USD gains, as it has through the second half of December. Beyond there, 1.5720 (50-DMA) and the 1.5770/80 area are the next levels to watch," says an exchange rate note from TD Securities. With only third tier data out of Australia overnight, the AUD and the NZD have been supported with this mornings risk on theme, with further support added by a solid rebound in Chinese PMI data. On the domestic front the UK manufacturing PMI managed to surprise with a healthy rebound in December from 47.7 to 49.6. Current production managed to eke back to flat at 50.1, but the driver of the surprise was new orders, which rose from 46.2 to 49.2 and was boosted by new export orders getting back above 50 for the first time in five months. This move was consistent, albeit stronger, than the rebounds we saw in Eurozone surveys, but at odds with the very weak CBI, and expect to see the survey dip lower once again in H1 as the Eurozone crisis worsens.

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