Daily currency report

A rise and then fall in global equities saw trading patterns move in and out of safe haven currencies. Originally, a mood of increased investor confidence, running in line with rising global equities, saw investors make a move to higher yielding currencies throughout the day, before a pullback in sentiment reversed the trend overnight. Risk appetite was initially buoyed by surprisingly positive comments from ratings agency Fitch and the Reserve Bank of Australia, who both cast a more upbeat mood on the chances of global recovery.

Sterling

Sterling traded within tight ranges on a day short of market data. The pound did edge higher against a broadly weaker dollar early in the day as investors bought riskier assets as concerns about a global economic slowdown eased.

US Dollar

The dollar suffered a bad day with an increase in risk appetite seeing investors take their money out of the dollar, before a reversal in equities overnight prompted a U-turn in currency trading patterns. The greenback hit a six-week low against the euro and declined versus all of its other major counterparts throughout the day, as a rally in global stocks boosted demand for currencies offering higher yields.

Euro

The euro continued its spell of relative stabilisation, moving near to 6 week highs against the dollar and two week highs against the pound. The single currency benefited from a rise in investor confidence as the Australian Central Bank delivered a more upbeat assessment of the global economy, allowing equities to rise.

Japanese Yen

After suffering from the rise in risk appetite, the yen paired its losses overnight as Asian equities reacted negatively to the poor ISM data that came out of the US earlier in the day. Japanese stocks in particular fell, ending three days of gains, as the weak data raised concerns a recovery in the world's largest economy is weakening.