Daily currency report

Safe-haven currencies were heavily sold-off as burgeoning risk appetite across all financial markets, as well as rising oil prices, benefitted both commodity currencies and the pound. Consequently, sterling opens at a five-month high against the US dollar, while the Australian dollar similarly has hit a seven-month high versus the greenback.

Sterling

Sterling appreciated across the board, buoyed by the general improvement in risk appetite and the rise in UK share prices. The pound also benefitted from data from property website, Rightmove, which reported a 2.4 per cent rise in home prices in England and Wales in May, the second-straight month of home price inflation. By the close of business, sterling was trading significantly higher against all the other major currencies, and looks to be in a good position to continue that rally.

US Dollar

The US dollar weakened as improving risk appetite following the rise in equities and oil prices reduced demand for the safe-haven currency. The greenback found itself down against both sterling and the euro although it did gain against the Japanese yen.

Euro

The euro rose against the dollar and yen, but lost ground against the resurgent pound. Markets failed to react in any significant way to the news that the eurozone posted a €400 million surplus in March after two back-to-back monthly deficits in January and February. Similarly, the single currency showed little reaction to comments from European Central Bank policymaker Axel Weber, who said that the ECB's policies would be enough to support the economy unless the situation got noticeably worse.

Japanese Yen

The yen hit session lows against the dollar and the euro after Japan's vice-finance minister said Japan is watching foreign exchange movements carefully and does not want exchange rates to have a negative impact on the economy. The news reminded investors of the possible risk of Japanese authorities intervening to weaken a surging yen.