Sterling plunged 0.80% against the dollar to a fresh 5-1/2 year low at 1.4431, after Britain's industrial production contracted 0.7% m/m in November, the highest such slide in three years. Manufacturing production also disappointed, falling 0.4% m/m, adding to its October's similar 0.4% decline. Sterling fell back towards a 11-month trough against the euro; trading at 0.7518, down 0.71% for the day. It changed hand at the rate of 169.93 against the yen, near a 15-month low.

European shares on other hand are having their best day in almost three weeks, boosted by the oil's recovery. The pan-European FTSEurofirst index jumped 1.80% to 1,359. Germany's DAX comfortably outperformed the wider market, surging 2.41% to finally get back above the 10,000 level. France's CAC is having it good as well, soaring 2.50% to 4,420. Britain's FTSE gained 1.81% to 5,978.

Oil prices rebounded handsomely from their 12-year lows in short-covering, with Brent crude futures up 57 cents, or 1.79% at $32.50 a barrel. U.S. West Texas Intermediary (WTI) crude futures rose half a dollar, or 1.53% to $31.90 a barrel.

Precious metals were dumped as risk appetite reigned in the markets, with gold futures down 9 dollars, or 0.80% at $1,087 an ounce. Silver futures lost five cents, or 0.37% to trade at $13.81 an ounce. Copper on the other hand showed some signs of recovery, edging up 0.15% to $1.976 a pound.