The pound, euro and other currencies regarded as higher risk rose after Singapore effectively re-valued its currency while upbeat US corporate earnings boosted appetite for risk. The Singapore move was viewed as a mark of confidence in the economic recovery. In the later part of trading the dollar received a boost against the Japanese yen after the release of US consumer inflation and retail sales data.

Sterling

Sterling held steady, consolidating recent gains against a weakening dollar after recent robust UK data, though hamstrung by political opinion polls. However, the pound was weighed down by political uncertainty in the run up to next month's general election as a result of conflicting opinion polls. The pound then went on to hit a seven week high against the dollar, extending gains as Federal Reserve chief, Ben Bernanke, testified to Congress.

US dollar

The dollar fell to lows against all major currencies after the Federal Reserve Bank's Ben Bernanke failed to raise expectations of higher US interest rates, disappointing some investors. Bernanke said that a moderate US economic recovery is likely to warrant very low interest rates for a long time.

Euro

The single currency hit lows against the US dollar after credit rating agency, Moody's, warned that there was a chance of a ratings downgrade for Greece as it struggles to service its mounting debt. The ratings agency said Greece faced a greater than 50 per cent chance of a ratings cut in the next 12 to 18 months, and that its budget consolidations programme still faces high execution risks.

Japanese yen

The yen suffered on the back of improved economic data from the US and elsewhere in Asia. The more upbeat outlook for the global economy prompted investors to sell the safe haven currency and invest in higher yielding assets - the once ubiquitous carry trade.

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