The US dollar came under renewed selling pressure after the non-farm payrolls report revealed that the world's largest economy had shed a further 125,000 in June. The euro had already been enjoying a mini-recovery as investors took heart from the smooth expiration of the European Central Bank's €442 billion loan facility, while sterling had gained on the back of solid construction industry data.

Sterling

Sterling hit a two-month high against a struggling greenback after weak US employment data prompted investors to dump the US currency. The pound climbed to its highest level since early May, tracking a rally in the euro which also shot up against the dollar.

US dollar

The dollar fell to lows against all major currencies as concern continues to mount over the strength of the US economic recovery following disappointing US jobs data. US private payrolls rose less than expected in June and overall employment fell for the first time this year as thousands of temporary jobs ended.

Euro

The single currency gained against the US dollar as investors looked past the economic problems in the eurozone and instead focused on the possibility of a stalled economic recovery in the United States. However, some analysts still remain cautious about the single currency ahead of the results of the European bank stress tests and a Greek Treasury Bill issue due later this month.

Japanese yen

The yen lost ground against both sterling and the euro, but held steadily against the US dollar. Nevertheless, the currency remains at historically high levels against all the other major currencies, and concern is growing that the yen's appreciation could hurt Japan's export-dependent economy.