The US dollar bounced higher as European equity index figures declined ahead of the opening bell on the region’s top stock exchanges. The euro fell to a five-week low against the US currency, which resumed gains made after Friday's above-forecast US jobs data.

Pound Sterling – UK Markets

The pound picked up overnight, rebounding to re-test the 1.65 level against a strengthened dollar. Sterling currently trades at 1.648 versus the greenback and 1.107 against the euro. Today Gordon Brown will unveil plans for cutting public spending by £12bn over four years, ahead of Wednesday's pre-Budget report. The aim will be to halve the UK’s budget deficit.

US Dollar – US Markets

The dollar hit a five-week high against a basket of currencies on Monday rallying from a 14-year low last week. Last week’s above-forecast jobs data boosted optimism about a recovery in the US and prompted speculation that the Federal Reserve will exit its ultra-loose monetary policy earlier than previously thought.

Euro – European Markets

The euro mustered a shallow recovery in overnight trading; rising from Friday’s low to re-test 1.49 against the US dollar. European equity index figures are trading lower ahead of opening, which also seems to be boosting the greenback for the time being.

Other Currencies – Highlights

The yen advanced this morning as Japanese exporters were attracted by the currency’s dip last week. A weaker yen makes domestic goods less expensive abroad and increases the value of overseas earnings. The yen currently trades at 89.90 against the US dollar.