Sterling fell more than one per cent against the dollar, snapping a four-day winning streak as investors booked profit ahead of a Group of Eight finance ministers' meeting. The pound also turned lower against the euro after rallying throughout last week to its highest level for 2009 on a growing belief that the UK economy is now poised for a recovery. The world's richest nations, heartened by signs the credit crisis is easing, have started to consider how to unwind rescue steps for their respective economies once recovery is certain, G8 finance ministers announced on Saturday.

Sterling

Sterling came down against the dollar and the euro on profit taking. Sterling ended the week up more than two and 2.8 per cent versus the euro and the dollar respectively. However, comments from incoming Bank of England policymaker, Paul Fisher, helped weigh on sterling as he warned against complacency despite signs of a recovery and said that economic output was likely to fall in the second quarter. UK finance minister Alistair Darling also warned that rising oil prices had the potential to be a "huge problem" for any recovery.

US Dollar

Risk appetite and the Federal Reserve's monetary policy outlook defined US dollar movement as the dollar declined against a majority of the world's most-traded currencies. The dollar faced a fresh bout of selling as Brazil and Russia joined China in saying they would shift some $70 billion of reserves from US Treasuries into multi-currency bonds.

Euro

The euro fell, hitting the day's low against the dollar after a plunge in Euro-zone industrial output reminded investors the region's economy continues to struggle. But movements were limited as investors awaited the start of the G8 finance ministers' meeting.

Japanese Yen

The yen continued to weaken across the board, even though Japanese consumer confidence improved in May from a month earlier, a Cabinet Office survey showed.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.