The pound and the euro both strengthened versus the US dollar as riskier currencies became more attractive, moving investors away from perceived safe havens such as the dollar and the Japanese yen. Solid corporate earnings releases from US multinationals and worries about the US economic recovery weighed on the dollar, including a plethora of weak economic releases across the pond.
Sterling
The pound hit a two-month high against the dollar, aided by stronger than expected UK employment data together with a soft US currency after strong corporate earnings boosted risk appetite in thin liquidity.
US dollar
The greenback weakened against both the pound and the euro as stronger than expected corporate earnings by large US corporations, such as microchip manufacturer Intel, encouraged investors to trade in higher yielding currencies.
Euro
The euro traded within its recent stronger ranges as appetite for risk picked up again and traders moved away from perceived safe havens such as the dollar and the Japanese yen. A positive Greek government bond auction which took place on Monday has dampened concerns about the sovereign debt crisis which recently plagued the eurozone. Also, worries about the US recovery after weaker than expected retail sales set the tone for a robust euro on Wednesday.
Japanese yen
The Japanese yen was the best performer, advancing against its major rivals. The Bank of Japan decided by unanimous vote to keep interest rates unchanged at 0.1 per cent as widely expected.