Daily currency report

The US urged China to let the yuan float freely, as the US trade deficit with China is bigger than with any other country, and a stronger yuan may narrow the gap by making Chinese exports more expensive. Oil set new record highs on both sides of the Atlantic on Friday as concerns over Iran's nuclear programme combined with fears over instability in the oil producing nations of Iraq and Nigeria.

GBP
The sterling stabilised against the euro and the dollar with markets focused on the UK interest rate outlook in the absence of major UK data. Some Investors were still looking back to weaker than expected March inflation data release, which took the sterling down from previous seven-month highs.

USD
The dollar fell to fresh seven-month lows against the euro, testing the key $1.24 support, and three-month lows against the yen at 115.24 after the G7 communiqué on currencies made the unprecedented statement of singling out China urging it for further currency flexibility.

EUR
The Central European currencies eased as growing political worries across the region fuelled profit taking and checked the rallies triggered by these recent cautious signals from the US Federal Reserve.

JPY
The yen hit an all-time low against the euro amid signs that Japanese investors were once again buying foreign bonds now that the fiscal year-end was behind them. It also dropped against more than a dozen other major currencies due to statements that disorderly increases in long-term bond yields should be avoided.