The US dollar once again strengthened, hitting multi-year highs against the euro as well as a 13-month high against sterling. It was a different story altogether for the euro, as investor sentiment remains deeply negative on jitters over the sovereign debt crisis and consequent austerity measures from member states. These measures, it is feared, could dampen growth in the eurozone and ultimately derail Europe's nascent recovery. In the UK, the sterling once again slid against the greenback after data showing UK house prices had slowed this month, although uncertainty over the new government's economic strategy had already put the pound on the back foot.

Sterling

Sterling hit a 13-month low against the dollar and also slipped against the euro as data showing a slowdown in UK house price growth raised concerns about the health of the British economy. Property website, Rightmove, stated that asking prices for British residential properties rose more slowly in May than they did in April. The data came with investors already concerned that fiscal tightening measures by the new coalition government may hurt the UK's growth prospects and possibly push the country back into recession.

US dollar

The greenback rose to a four-year high versus the euro as its uptrend against the common currency continued into the new week. The dollar has more than benefited from its safe-haven appeal as jitters in the eurozone and UK continue to worry investors driving them away from riskier assets.

Euro

The single currency plunged to a four-year low against the dollar on lingering sovereign debt worries and fears that planned belt-tightening measures will have a negative effect on growth prospects in the 16-member bloc. The euro has dropped by more than seven per cent against the dollar so far this month and is about 14 per cent lower for the year, making the single currency the worst-performing major currency.

Japanese yen

A government survey revealed that sentiment among Japanese manufacturers was positive for the first time in two years in May while Japanese consumer confidence also improved for a fourth consecutive month.

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