Daily currency report

The dollar fell against major currencies as a rally in US stocks and hopes that the worst of the economic crisis could be over eroded the greenback's safe-haven appeal. The euro rose to a one-month high after positive news on US home sales. Sterling fell against the dollar dented by caution ahead of a Bank of England policy meeting.

Sterling

Sterling rose to a two-week peak against a weaker yen in the wake of data showing the pace of deterioration in the UK manufacturing slowed in April. The manufacturing Purchasing Managers' Index improved to 42.9 in April from and upwardly revised 39.5 in March, climbing towards the 50 level that separates expansion from contraction.

US Dollar

The US dollar slipped across the board as stock markets rallied and investors continued to back the belief that the worst of the global economic crisis could be over. Part of the reason for the new-found optimism was data that showed pending home sales jumped by 3.2 per cent in March. Construction spending also jumped for the first time since September.

Euro

The single currency went under pressure after data confirmed that the 16-member bloc's manufacturing sector still contracted in April - albeit at a slower rate. The eurozone Purchasing Managers' Index rose to 36.8 last month from March's 33.9. European Central Bank Governing Council member Axel Weber said that growth in Germany would not return until the second half of 2010.

Japanese Yen

The yen remains under pressure as investors exit safe-havens, investing in more risky assets. Regional sentiment improved slightly after Southeast Asian nations announced that they were creating a $120 billion emergency fund to shield their economies against the economic downturn, with China and Japan contributing a large portion to the fund.