Daily currency report

Investors seem to be back in the hunt for high-interest currencies and investments after a record fall in US weekly jobless claims turned the temperature down on global growth fears. Traders have spent the best part of this week listening to warnings about the world economy from the International Monetary Fund, and bidding the safe haven US dollar to one-month highs against its major rivals. IMF chief Christine Lagarde was vocal again, but this time helped support market sentiment, and the euro, by encouraging Spain and Greece to be given more time to meet fiscal conditions. Therefore, the single currency goes on the back of strong gains against both the US dollar and British pound but will be at risk from eurozone economic data.

Sterling

Surprisingly good US economic data helped diffuse some anxiety about the world economy, allowing the pound, and currencies labelled as a little risky, to reclaim earlier lost ground against the protective US dollar and yen. However, a better mood across financial markets has pushed sterling back towards against the euro; but the single currency may struggle to march any higher in front of eurozone economic data.

US dollar

Weekly US jobless claims fell to over four-year lows according to the unemployment report, giving traders a strong indicator to dump the safer US dollar and head towards the higher-yield end of the currency market. The statistics immediately made an impression on financial markets because investors have been battered with worrying predictions about the global economy all week.

Euro

The euro bounced higher off better-than-expected US unemployment data but could see eurozone industrial production figures cut through those gains. Factory output is forecast to have dropped and the data should serve as a fresh reminder to investors that the European economy probably hit recession in the third quarter, and in response, the European Central Bank may have to ease its monetary policy again at some point.

Chinese renminbi

China’s latest import and export data will be published this weekend and could carry a heavier threat for financial markets following warnings about a slowing global economy from both the World Bank and International Monetary Fund this week.