Daily currency report

After a day of economic data, the market saw sterling improve due to better than expected CBI data. A much better reading than expected saw the pound gain some much needed breathing space. Some support was given to the euro after the release of confidence figures for the single currency bloc. Sentiment readings for all measured sectors were better than expected, lending further support to the widely regarded view that the eurozone is now well out of recession.

Sterling

The big schedule of economic data started off with the Bank of England's consumer credit report for August. This continued to show signs of restraint by consumers. Final GDP figures for quarter 2 came in slightly better than expected. GDP was down -0.6 per cent which was marginally better than the -0.7 per cent fall markets had forecast. Gordon Brown urged Labour to "change the world again" in what was billed as his make-or-break speech to the party's annual conference. His speech kept him from making any comment on the state of the pound which may have contributed in part to sterling's strength during the recession.

US Dollar

It was a mixed day for the US dollar. Releases of both good and bad economic data saw the currency pushed and pulled against most crosses.

Euro

Sentiment figures for the eurozone were the single currency's main driver. Data across all measured areas, which include the manufacturing, consumer, industrial and service sectors, came in better than expected. The data consolidated the euro's strong position despite the European Central Bank comments made earlier in the week which had raised concerns over the strength of the single currency against the dollar.

Japanese Yen

After very little activity seen from Japan, the yen is trading relatively quietly after comments from the Finance Minister on currency intervention. New Japanese Finance Minister Hirohisa Fujii had already talked down the risk of currency intervention, earlier in the week despite a pick-up in safe haven buying.