The euro saw its biggest one-day move against the dollar since July of last year. The rational behind the move was multi-faceted. Primarily sentiment towards the European debt crisis shifted, with strong demand for Portuguese, Spanish and Italian debt helping to renew confidence in the eurozone. The European Central Bank left interest rates on hold and furthermore Jean-Claude Trichet’s comments following the meeting were deemed as hawkish on the short-term inflation outlook, and allowed the euro a lift. Lastly, US economic data failed to inspire strong hope for the recovery outlook, with jobless claims in the US rising to 445,000, well above forecast.

Sterling

The economic data released in the UK was mixed with manufacturing output beating forecasts, while industrial output slipped below expectations. The impact on sterling was neutral, but Vincent Cable saw gains on the back of strong euro-dollar movements, which also left sterling under pressure against the single currency.

US dollar

The US dollar gave up most of this week’s gains against the euro in. The US economic data was not as inspiring as markets had anticipated, but also confidence in the eurozone returned after successful debt auctions were placed.

Euro

Sentiment towards the euro has shifted, but the reasons behind the euro’s early move have not changed and sentiment is a volatile thing. Investors pushed back the end of the world for the euro, after debt markets saw strong demand for Portuguese, Spanish and Italian debt. Furthermore hawkish comments from Mr Trichet provided an extra lift.

Japanese yen

The Japanese yen saw small gains from economic data and the government’s cabinet reshuffle which occurred in the overnight session. PM Kan appointed a fiscal hawk to become its deputy in an effort to tackle reforms to rein in public spending.

Travelex Global Business Payments Malta, freephone: 800 733 22, www.travelex.com/mt/