Daily currency report

The euro gained support after the ECB left rates on hold but signalled another hike in December. The yen was also doing well after Japan's central bank indicated that they expected to be raising rates soon.

GBP

It was a quiet day for the sterling, which moved in response to news from the US and the eurozone. By the end of the day, the pound was down slightly against both currencies. Early trading yesterday saw the pound gain some support from a UK services report that showed that the services sector grew faster than expected in October, backing up the expectation of an interest rate hike from the BOE next week.

USD

Given the recent run of soft economic data from the US, any weakness could hurt the dollar amid concerns that slowing economic growth could lead to rate cuts. Five out of six of the last payroll numbers have been worse than expected and the risk for the dollar is that this could continue.

EUR

The ECB left rates on hold at 3.25 per cent as expected, and all but confirmed that there would be another increase in December. The euro was also supported by the eurozone manufacturing purchasing managers index, which rose in October to a three-month high of 57.

JPY

The yen was a surprise winner after bullish remarks from Japan's central bank and the Ministry of Finance. Bank of Japan Governor Toshihiko Fukui stated that the bank planned to raise rates if the economy moved as expected.