European equity markets were broadly higher in early morning trade fueling risk appetite in currencies as all the majors with the exception of the yen rebounded against the buck after yesterday massive sell off. The Asian and early European trade was characterized by strong carry flows with yen crosses helping to lift the euro the Aussie and the pound.

The pound lost more than 200 points by early London trade after the currency came under assault on multiple fronts as the economic fundamentals of the UK economy deteriorated further, UK jobless rolls swelled by 138.4K versus expectations of 84.5K as the overall unemployment number crossed the critical 2 Million mark. The claimant count rate increased by 4.3% versus 4.0% forecast while average earnings including bonus dropped from 3.2% the month prior to 1.8% in January. Additionally the unit was hurt by an earlier report from IMF that suggested UK recession could last well into 2010.

UK jobless rolls swelled by 138.4K versus expectations of 84.5K as the overall unemployment number crossed the critical 2 Million mark. The claimant count rate increased by 4.3% versus 4.0% forecast while average earnings including bonus dropped from 3.2% the month prior to 1.8% in January.

Canadian labor markets deteriorated further in the month of February as 82.6K job disappeared against expectations of only 46K loss. The unemployment rate climbed a whopping 50 basis points to 7.7% from 7.2% just a month earlier. Full time employment fell by 110.9K jobs while part time employment rose 28.3K. This was the fourth consecutive month of job losses for the Canadian economy.

Canadian unemployment increased by -34K jobs versus forecast of losses of -21K as the unemployment rate inched by another 30 basis points to 6.6% from 6.3% the month prior.

The euro staged a strong rebound in early European trade this morning rising all the way above the 1.3600 handle, but news of greater than expected job losses in Germany halted the advance at that level for the time being. The rally in the pair started in Asia as bargain hunters reemerged near the 1.3500 figure attracted to the relative value in the pair after three straight days of selling. The push higher caught the shorts by surprise and EUR/USD quickly ran through the 1.3600 barrier after triggering a slew of stops.