Daily currency report

Overview

Further record highs were set by safe haven currencies as this week’s risk-off mood, triggered by new analysis on European “stress tests”, spilled over. The Swiss franc again breached record lifetime highs while the Japanese yen hit fresh heights against the euro and US dollar. However, a combination of news from across the globe later in the day helped mildly improve risk appetite.

Sterling

Sterling rose to its highest level in September against the US dollar. Strong domestic data helped soothed fears that growth in the UK economy is slowing. Industrial and manufacturing production numbers were both in-line with expectations for the month of July. Both figures rose by 0.3 per cent on the month and represent healthy growth in each sector.

US dollar

The US dollar fell, pressurised from activity both home and abroad. The US dollar fell against riskier rivals but did manage to firm against the safe haven Japanese yen after having reached fresh 15-year lows the previous day. Encouraging news from around the globe helped ease safe haven demand which weighed on the US dollar. Solid bond auctions in Europe, better than expected data from the UK, an interest rate hike in Canada and strong employment figures from Australia helped improve sentiment.

Euro

The euro regained some lost ground after solid bond auctions in Portugal helped ease fears surrounding sovereign debt in the eurozone. Disappointingly, further evidence of slowing overseas demand hurting German exports was seen in the industrial production figures for July. Production rose but only just at 0.1 per cent on the month, well below forecasts of a one per cent rise. Germany’s export-led recovery has been the key driver of growth in the eurozone and slowing activity in the bloc’s largest economy does not bode well for its economic outlook.

Japanese yen

The Japanese yen continues to trade at firmer levels against riskier rivals as this week’s risk-averse mood continued. The yen again reached fresh 15-year highs against the US dollar, while posting gains against a basket of other currencies. However, encouraging news from Europe and overnight in Australia helped dampen demand for safe haven currencies such as the yen.

Commercial Foreign Exchange Travelex Malta, freephone: 800 733 22, www.travelex.com/mt/

Sign up to our free newsletters

Get the best updates straight to your inbox:

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.