Daily current report
Overview
The dollar gained further against both the euro and the pound as traders took the opportunity to sell the euro, as data out over the past few days has confirmed that the eurozone economy is not immune to the current pressures that are plaguing the global economy.
Sterling (GBP)
On the exchanges the pound lost ground against the US dollar, but was up against the euro. Britain's divided economy was starkly highlighted as industry faced its biggest increase in costs for 18 years while retailers were forced to cut prices aggressively last month in the face of weakening consumer demand. Manufacturers saw a rapid rise in the cost of raw materials such as oil, which has almost doubled to $120 a barrel with companies struggling to pass on all of these higher costs to customers.
US Dollar (USD)
The dollar made further gains as data showed signs of resilience in the US labour market and separate European figures undermined the Euro favouring the greenback.
Euro (EUR)
The euro slid further from record highs set earlier in the week versus the dollar after the biggest monthly fall in German business sentiment since September 2001 dented confidence in the eurozone economy. The news suggested that the eurozone may not be immune to a US lead economic slowdown, pouring cold water on the expectations of an interest rate hike later this year, which earlier in the week had seemed a distinct possibility.
Japanese Yen (JPY)
Japanese annual inflation hit a decade-high of 1.2 per cent in March, helping trigger one of the biggest ever sell-offs in yen bonds as investors realised that Japan is not immune from price pressures facing the rest of the world.