Daily Currency Report

The sterling hit seven-month highs against the dollar, but gains were quickly erased as the dollar rallied on strong US consumer confidence data. The euro made significant gains against the dollar. The dollar eventually stabilised due to a combination of strong US economic data. Elsewhere, oil fell after US President George W. Bush suspended deliveries to the US emergency reserve to boost supply in the market, to counter near record prices.

GBP
The pound rose sharply against the dollar, partially due to the UK industrial trends data which ended slightly better than expected. However, action in sterling was mainly dominated by broader dollar moves.

USD
The dollar bounced back against the other major currencies, after a measure of US consumer confidence rose to its highest level in four years, and existing home sales rose faster than expected. The data helped the dollar claw back some ground after falling to its lowest level in the last few months.

EUR
The euro leapt to a seven-month peak against the dollar after Germany's IFO business climate index rose to a 15-year high. Some traders speculate that the ECB could raise its rates three more times this year.

JPY
The yen erased an earlier advance against the dollar and the euro after Japan's Finance Minister stated the currency's rapid appreciation was unwelcome.