Risk appetite received another boost as strong retail sales figures from the US reassured investors that economic recovery is indeed taking root. There was also good news from Japan, as official data showed growth of 4.8 per cent in Q3. The cumulative effect of the data was to send the US dollar lower across the board as investors moved away from safe-haven assets. Conversely, sterling enjoyed a really positive day and looks set with a strong footing against both the euro and the US dollar.

Sterling

Sterling hit a three-month high against the US dollar and also ended the session higher versus the euro as a direct result of an improvement in market optimism. The moves had little to do with any underlying strength in sterling as the only piece of UK economic data released was a disappointing Rightmove House Price index.

US dollar

The dollar hit fresh 15-month lows after the Federal Reserve chairman Ben Bernanke's statement. Initially rattling markets stating that the central bank had been monitoring dollar movements carefully, by the conclusion of his speech it became evident that any real intervention into currency markets was far from likely.

Euro

Euro trade was largely uninspired, barely moving after the final reading of HCPI figures came in at 0.1 per cent year on year. The figures, which showed a fall in eurozone prices, gave belief that the European Central Bank will have to keep their ultra loose monetary policy in place for further support; despite moving out of recession.

Japanese yen

The yen strengthened against the dollar, following data that showed Japan's economy grew faster than expected in the third quarter. The figures showed that the country's economy has grown for a second successive quarter. The world's second largest economy has accelerated by 1.2 per cent in the three months from July to September and Japanese Gross Domestic Product grew at an annualised rate of 4.8 per cent in the third three-month period of the year - faster than economists had predicted.