The pound rallied in early deals Tuesday as a series of decent Spanish, Dutch and Italian bond auctions eased concerns over Europe's debt crisis, which eventually sent equities higher.
More significantly, the Netherlands held a successful debt auction despite the collapse of the government over budget cuts a day earlier.
The Dutch government raised EUR 1.995 billion from the sale of it 2- and 25-year bonds. The 3.75 percent July 2014 bond was placed at an average yield of 0.523 percent, while the 4 percent January 2037 bond was sold at a yield of 2.782 percent.
Thus far, the U.K. FTSE 100 index advanced 0.40 percent, France's CAC-40 index climbed to 1.24 percent and Germany's DAX jumped 0.73 percent.
The U.K. public sector net borrowing (PSNB) excluding temporary effects of financial interventions, was GBP 18.2 billion in March, up from last year's GBP 17.95 billion.
This was also higher than GBP 12.2 billion in borrowing in February and above economists' forecast of GBP 16 billion.
Public sector net borrowing, including interventions, rose to GBP 15.9 billion from GBP 9.9 billion in the previous month. This was also higher than forecast of GBP 14.2 billion.
The public sector net borrowing is the amount of new debt held by the UK government and the growth in borrowing is considered negative to the economy.
The pound touched 0.8146 against the euro around 6:30 am ET, its highest mark since August 23, 2010. With the RSI staying in the oversold territory in the daily chart of EUR/GBP pair, the pound may erase some of its recent gains in the near-term.
The sterling touched its pivotal resistance zone of 1.4760/65 against the Swiss franc around 6:30 am ET, its highest level since January 9. The next barrier for the pair could be its psychologically important mark of 1.48.
Swiss trade surplus recorded a surprise drop in March, the latest figures from the Federal Customs Administration showed today.
The trade surplus totaled CHF 1.69 billion in March, down from a revised CHF 2.61 billion surplus in February. Economists were looking for an increase to CHF 3 billion.
Exports fell 3.3 percent year-on-year in March to CHF 17.5 billion. Imports fell 6 percent on year to CHF 15.8 billion.
At the same time, the Swiss consumption indicator increased significantly in March led by improved business in retail trade and record-high new car registrations, survey data released by investment bank UBS revealed today.
The UBS consumption indicator for the Swiss economy rose to 1.22. The consumption indicator is currently signaling a consumption growth of 1.2 percent for the year, the bank said.
Against the dollar, the pound advanced to 1.6161 around 5:45 am ET and this set the highest level for the cable since October 31, 2011. The immediate resistance for the pair is seen at 1.6170 and a move above this level could set its peak since September 2011.
The sterling also touched an intra-day high of 131.28 against the yen around 4:20 am ET and re-tested the level for a number of times in subsequent trading hours. If the pair breaches this point, 131.80 is seen as the next likely target level.
Looking ahead, the S&P/Case-Shiller home price index and the Federal House Finance Agency's house price index-both for February, Commerce Department's new home sales for March and Conference Board's consumer confidence report for April are expected to influence the market in the New York session.
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Forex News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.