Worse than expected services PMI knocked the pound off five-week highs against the US dollar and euro while in the eurozone GDP figures for Q4 of 2009 disappointed, and together with the faltering growth figures coupled, with continued focus on the situation in Greece, saw the euro ultimately lose ground. The US dollar had started on the back foot after seemingly dovish meeting minutes from the Federal Reserve's March meeting. However, uninspiring data from the UK and Europe gave the greenback excuse to take back some ground.

Sterling

After four days of straight gains the pound's progress was checked as a disappointing construction PMI reading took the wind out of the sails causing the pound to retreat from five-week highs against the US dollar and euro. However, the figure still leaves the UK's dominant service sector firmly in expansion so losses were limited.

US dollar

The dollar lost ground as minutes from the Federal Reserve's last monthly meeting, released overnight, revealed that interest rates could remain on hold for some time. The Federal Open Market Committee did not rule out raising interest rates if factors such as rising inflation forced their hand. The greenback was able to regain some of its losses in the opening session as European releases gave opportunity to take ground back.

Euro

The euro enjoyed a steady day's trading after a mixed bag of data. Services PMI for the bloc showed an improvement to 54.1 which bettered market expectations of a more modest 53.7 reading. The German, French and Italian components of the PMI reading all performed well enough to also beat market forecasts. Meanwhile the same reading for the UK disappointed, allowing the single currency to make up some recent lost ground on sterling.

Japanese yen

The Japanese yen started trading relatively unmoved after the Bank of Japan announced it would keep interest rates on hold. However, the yen lost ground against a basket of currencies as the Nikkei dropped by 1.1 per cent as a report showed that machinery orders in February dropped unexpectedly.

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