Daily currency report

The sterling rebounded against the dollar, recouping some of its losses made following Friday's unexpectedly strong US employment numbers, and supported by a possible UK interest rate rise next month.

GBP
The pound outperformed both the euro and the dollar. Improvements in the economy have sparked talk of an interest rate hike as early as February. Wage growth appears to have held up well, which should encourage more spending by UK consumers.

USD
Markets will be waiting for the release of the Trade Balance and Retail Sales. Looking for more clues on the Fed's future policy path, the market will turn to comments by top Fed officials later this week.

EUR
The ECB will be holding a monetary policy meeting and even though no changes are expected, comments from the ECB president could decide whether further levels can be broken. The market is still expecting firmer numbers from the manufacturing sector. Should we see another downside surprise, the euro could remain under pressure heading into the ECB meeting.

JPY
With Japanese markets closed for "coming of age day" the yen sold off against major currencies. The Bank of Japan is widely expected to lift interest rates this month.