Daily currency report

The dollar slipped as higher oil prices, gains in share prices and better-than-expected sentiment in the eurozone boosted hopes for a global recovery, sharpening investors' appetite for risk. Currencies of commodity producers such as the Australian dollar rose as oil prices surged above $73 per barrel to hover near an eight-month high. Foreign currency buying linked to recent launches of new Japanese mutual funds pushed down the yen across the board in early Asian trade, though it later trimmed losses. Sterling has jumped to an eight-month high as consumer confidence data released showed British consumer morale improved to its best level in 14 months.

Sterling

Sterling hit its highest level of the year against a basket of currencies, raised by gains against the dollar. The currency pair was boosted after data showing that the UK house prices rose for the second month in a row in June and posted their smallest annual fall in nearly a year suggesting that the ailing UK housing market may be stabilising.

US Dollar

The markets will pay close attention to US payroll figures for any signs of improvement in the economy's health. As a result, dollar performance was dictated by external market factors. Higher oil prices and rising equity markets pushed the dollar down against a basket of currencies.

Euro

The market was braced for eurozone inflation data for June but is likely to remain cautious ahead of the quarter end and a European Central Bank policy meeting. The European Central Bank is expected to leave interest rates at a record low of one per cent and indeed through most of next year.

Japanese Yen

Japan's jobless count rose to a new five-and-the-half-year-high in May and job availability sank to a record low, reinforcing the view that domestic consumption will be a drag on any recovery even though government stimulus helped produce a rise in household spending.