The Bulls re-entered the ring yesterday as the markets took a more optimistic view on global growth, in addition concerns on the Euro zone debt crisis eased.

The move into risk was prompted by a series of positive manufacturing reports from around the globe, in particular China’s PMI data remained positive.

The pound was bolstered by a rise in manufacturing activity for the UK last month showing output expanding at the fastest pace since March last year - this helped the pound hit a 2 month high against the US dollar.

In fact the US dollar lost across the markets, a rise in US manufacturing activity alongside China’s data helped swerve the markets into risk on mode which is USD negative. Not surprisingly the USD lost against the usual suspects - the Pound, Euro, Australian dollar and other commodity based currencies and emerging market currencies.

Surprisingly the USD was also down against the safe have Yen and Swiss Franc- this was due to nervousness on the threat of intervention by the Bank of Japan and the Swiss National Bank. The current USD/JPY levels are very close to previous levels where the BOJ intervened in October. In addition EUR/CHF is dangerously close to the 1.20 peg - currently trading at 1.2045 - the SNB has said that it will intervene to weaken the Swiss Franc at the 1.20 level. One to watch for the remainder of this week.

Back to the Eurozone and yesterday was a good day for a change with Eurozone country bond auctions successful and in turn yields on Italian and Portuguese debt easing. Feelers were also hitting the markets that the negotiations on the private Greek debt deal were very close to fruition. Today we could see some reversal in the fortunes for the Euro if the promises of resolution on the debt deal do not materialise.