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Daily currency report

Overview

Sterling extended its gains with investors buoyed by yet more positive data from the UK. The US dollar was able to regain some levels despite the release of consumer confidence figures in the US which fell to its lowest level since February.

Sterling

A survey by the Confederation of British Industry revealed that retail sales rose at their fastest pace in three years, and following the Q2 GBP figures investors glimpsed the possibility of growth remaining strong over the summer. Sterling hit five month highs against the still weak US dollar.

US dollar

The greenback was able to take back some losses. A drop in US consumer confidence to its lowest level since February shocked investors into regaining some of their safe haven positions in the dollar. Spurned on by concerns surrounding the health of the US job market, consumer confidence fell to 50.4 in July, below the 51 forecast. The Case-Shiller report showed that house prices rose more than expected in May; somewhat softening the blow that consumer confidence had struck.

Euro

The euro maintains its position as the darling of the currency markets, with investors clambering to invest in the single currency. The euro’s ascent was encouraged by still rising equity markets in Europe as earnings from Swiss bank UBS lifted European stocks.

Japanese yen

The yen fared badly as speculators remain unwilling to support the safe haven currency in the face of such overwhelmingly positive market sentiment. Following negative consumer confidence figures in the US, the greenback was able to extend gains against the yen. Of all the safe haven currencies the yen remains one of the weakest, with investors wary to invest in a currency whose recent strength continues to be to the detriment of Japanese exports.

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