Daily currency report

The dollar ended last week considerably higher against the majors as investors reassessed the future prospect of aggressive monetary easing from the Federal Reserve. The turnaround in sentiment was sparked from weaker than expected data from the UK while the eurozone showed signs that it is not completely immune from the current credit crunch which has plagued Britain and the US.

Sterling (GBP)

The sterling ended last week down against the dollar but looking a little healthier against the euro as mixed data and a surprise in the minutes from the MPC's April meeting sent the pound on a rollercoaster of a week.

US Dollar (USD)

Some analysts are predicting that the US dollar has turned a corner and that this week's interest rate decision is no longer a formality of a 25 basis point cut. This change in sentiment coincided with data from the eurozone which showed the first signs that the region's resilience in the face of the recent credit crisis was starting to crumble.

Euro (EUR)

The euro showed its first signs of being affected by the worldwide credit crisis and showed that even the seemingly impenetrable eurozone is susceptible to the worsening economic storm. Remarks from the European Central Bank remained hawkish but business sentiment in the eurozone's two biggest economies has fallen sharply.

Japanese Yen (JPY)

A slight recovery in investor confidence and risk appetite led to many traders moving back into risky carry trades hurting the yen, along with these trades the yen was pushed on the back foot as Tokyo shares climbed to two-month highs. The yen fell to two-month lows against the dollar as the view that the US Federal Reserve will stop cutting rates soon filtered through to the market.