Daily currency report

Sterling weakened against the dollar, as the US currency rallied on the back of surprisingly strong growth data, which added to optimism that the world's biggest economy is recovering from the recession. Sterling also inched further away from a five-month high versus the euro. The single currency earned a slight reprieve after being dogged by ongoing concerns about Greece's ballooning debts.

Sterling

Sterling ended down significantly against the dollar and marginally against the euro, in a week that witnessed the UK exit its recession for the first time in 18 months. Although, the fourth quarter GDP data was somewhat disappointing, indeed the best that could be said was that the figure was not negative.

US dollar

The dollar strengthened across the board after data showed the US economy expanded more than expected in the fourth quarter of last year. The US economy grew by 5.7 per cent in October-December, the quickest pace in more than six years, as businesses reduced inventories less aggressively, the US Commerce Department announced.

Euro

The euro earned a slight reprieve against sterling after a European Union official, Joaquin Almunia, claimed there was no chance of Greece defaulting on its ballooning debts. His comments were echoed by German Economy Minister Rainer Bruederle, who said there would be no bailout of the indebted nation by Germany or France.

Japanese yen

The yen rose to six-week highs against the US dollar on the back of China's announcement that as of last week, its banks reserve requirements would be increased, which was seen as form of policy tightening and spooked investors.