Daily currency report

The pound was able to recoup much of the losses made against the euro and the dollar as risk appetite returned to the market. While German GDP data has disappointed, French, Italian and eurozone-wide figures are yet to be released. All are expected to show improvements from Q2 but as Germany's figures have proved, nothing can be taking for granted in the current economic environment.

Sterling

In a session bereft of data in the UK, the pound initially continued to suffer on the back of the Bank of England's quaterly inflation report and Mervyn King's comments during the post-release press conference. However, the pound has been able to claw back the losses made against the euro and the dollar as disappointing German data revealed the biggest economy in the eurozone expanded slightly less than expected.

US Dollar

The dollar gained against both the pound and the euro as a US report revealed that initial weekly jobless claims were lower than expected. This data had a far larger impact than usual as it contrasted with recent investor concerns that US economic recovery would be tepid with fewer jobs being created to replace those lost during the recession.

Euro

Eurozone government bond futures edged up as German data revealed that the biggest economy in the bloc expanded slightly less than expected in the third quarter of the year. Subsequently the euro erased most of the gains that had been made against the pound.

Japanese Yen

The Japanese yen weakened against the pound as Sumitomo Mitsui Financial Group said it expects bad-loan costs at its parent company.