Daily currency report

Friday saw the greenback come under great selling pressure against currencies with prospects of further hikes in interest rates, particularly the euro. Focus for the upcoming week will be the release of US retail sales and consumer price index.

GBP
The sterling closed well last week, with one-and-a-half-year highs against the dollar, as investors sold-off the US currency.

USD
China said it will continue with plans to diversify the nation's reserves out of dollars. The Fed would continue to monitor and analyse money growth even though the relationship between money and inflation has been unstable.

EUR
The euro gained ground against a very weak dollar, resulting in two-and-half-month highs. Investors remain focused on interest rate differentials, and fully expect the ECB to raise interest rates more aggressively than the other major Central Banks.

JPY
A senior trader at Bank of Tokyo said Japanese investors have been trimming the proportion of dollars in their investment trusts in favour of sterling, euro, and Australian and New Zealand dollars. Bank of Japan governor Toshihiko Fukui wants to raise interest rates early but gradually.