Daily currency report

Sterling remained well-supported against both the US dollar and the euro, benefitting from improved sentiment as well as better than expected market data. Elsewhere, the US dollar was the other winner, rising against most of the other major currencies as economic data appeared to underline the fact that the downturn in unlikely to end soon.

Sterling

Sterling enjoyed another good session, posting its highest level against the US dollar since mid January, and also hitting a new six week high versus the single currency. While the pound continued to benefit from growing market optimism surrounding the banking sector, there are also the first signs that the strategies employed by both the government and the Bank of England are beginning to work.

US Dollar

The US dollar traded stronger against the euro as falling stocks around the world and persistent worries about the economy added to the greenback's allure as a safe-haven currency.

Euro

The euro dropped to a series of recent lows against the other major currencies after European Central Bank policymaker, Axel Weber, said that the central bank would announce in early May whether or not quantitative easing measures would be adopted. Mr Weber argued that the Bank should put a floor to interest rates next month, pressuring policy makers to resolve their squabble over a package of new measures to rescue the economy.

Japanese Yen

The yen rose to the highest level in two weeks against the euro after a government report showing China's economy expanded at the slowest pace in almost a decade dampened demand for higher-yielding assets. The news prompted a return to safe haven currencies, with the yen benefitting significantly.