Daily currency report

Dominating the headlines was the news that the price of a barrel of crude oil passed the $122 mark for the first time. The fear is that spiralling costs could further erode the strength of a global economy which has already been weakened by the recent credit crunch.

Sterling (GBP)

The pound fell against the dollar after an industry report showed UK consumer confidence fell to its lowest level in at least four years in April as a weakening housing market and higher living costs depressed shoppers. Prior to this data, it had been widely expected that the Bank of England would leave rates at 5 per cent due in part to the risk of rising inflation, however, evidence of a rapidly cooling economy and falling housing market means that the Bank will now have to make a difficult call as to what is the greatest threat to the UK economy.

US Dollar (USD)

The dollar rose against the euro as the President of the Kansas City Fed, Thomas Hoenig, said serious inflation pressures may spur the central bank to raise interest rates. The currency halted two days of losses versus the euro after Mr Hoenig said the US economy would recover later this year.

Euro (EUR)

The euro failed to make headway across the major currencies after the single currency was unable to break free from recent trading ranges against the US dollar.

Japanese Yen (JPY)

After plunging at the market open on the multi-billion dollar losses reported by UBS and Fannie Mae - sending the Japanese yen higher across the majors - the Dow eventually finished the day in the black. As a result, the yen ended the day almost completely unchanged versus the greenback, euro, and British pound.