Daily Currency Report
Overview
Last weekend's G7 meeting posed no threat to the Japanese yen, but it lost some ground to the dollar. With no significant data out early this week, currencies remain relatively unchanged.
STG
Following last week's highs, the sterling fell to session lows against the greenback and the euro after inflation data came in weaker than expected, cooling expectations for a near term rate hike.
USD
The dollar closed in on recent four-year highs against the yen. A strong USD is in the interest of the US and exchange rates should be determined by market forces, stated US Treasury secretary Henry Paulson.
EUR
The euro briefly hit a record peak versus the Japanese unit after G7 officials made no explicit mention of its weakness at their weekend meeting. The euro was down 0.1 per cent at 158.06 after hitting a record high of 159 earlier, with traders citing profit-taking after the peak was reached.
JPY
Rather than pressuring Tokyo to tackle the yen's fall against other major currencies, G7 finance ministers and central bankers called on investors to consider Japan's strengthening economy and be wary of one-way bets in foreign exchange.