Daily currency report

Trading in both the US and the UK was subdued as there was little in the way of key economic data released to inspire market players on both sides of the pond. Instead, investors turned to data coming out of Europe and the key Q1 GDP numbers published from all the primary eurozone economies. The negative data coming out of Europe helped boost both the greenback and the yen against both sterling and the euro. This news was then followed by a larger than expected contraction in the overall eurozone economy, which consequently made traders even more risk-averse, weighing heavily not only on the euro but also the pound. Traders decided to go with the safe haven currencies boosting the US dollar against both the euro and sterling.

Sterling

Sterling slipped against the US dollar after a string of figures showing weakness in the eurozone economy dented demand for currencies perceived to be high-risk, including the pound. Sterling did, however, post moderate gains against the euro following all the negative data coming out of Europe.

US Dollar

The US dollar rose across the board as global stock losses reduced investor appetite for risk while separate data showed that the eurozone economy contracted at its fastest pace on record.

Euro

The recession in the eurozone intensified markedly in the first quarter, dragged down by an almost four per cent contraction in the German economy. Besides Germany, the pace of economic contraction was particularly severe in The Netherlands and Italy, which saw a 2.8 and 2.4 per cent fall in GDP respectively.

Japanese Yen

The yen rose broadly as much weaker than expected gross domestic product data out of Germany and various eastern European countries sparked renewed concerns about the depth of the global economic recession. This drove investors to buy safer assets currencies as the yen.