Daily currency report

The dollar posted its largest single day gain against the other major currencies for over five months after data showed the US shed fewer jobs than expected in May. The greenback's gains were across the board, although most notably they came at the expense of sterling and the euro. Sterling came under heavy selling pressure as a result of political uncertainty and question marks over Gordon Brown's ability to carry on as Prime Minister.

Sterling

Political uncertainty and profit taking combined to send sterling lower across the board. The political tensions in the UK threaten the outlook for long-term stability, and sterling looks set to continue to depreciate against its major currency counterparts.

US Dollar

The dollar ended strongly after the non-farm payrolls report provided yet further evidence of an economy that is beginning to recover. While some economists are confidently predicting the end of the recession, it is nevertheless worth noting that the unemployment in the US is still close to record levels and that GDP remains mired in negative territory.

Euro

The euro gained against sterling, but lost ground versus the US dollar, as the greenback rally really took hold. Economic data failed to cast any new light on the true state of the economy. The unemployment rate was the main cause of concern as data showed that it had jumped to nearly 10-year highs.

Japanese Yen

The yen rose from a one-month low against the dollar and also gained versus the euro after Japanese reports showed bankruptcies declined and merchant confidence improved.