Pound Sterling - UK Markets

The UK Treasury has failed to sell all its government bonds in an auction for the first time since 2002. The Debt Management Office has said that the Treasury wanted to sell £1.75bn of 40-year bonds, but investors only bid for £1.63bn of the debt. Analysts said this may reflect concern over the state of the public finances as government borrowing surges.

Meanwhile, the UK February Retail Sales Report has seen the pound decline against the US dollar.

US Dollar - US Markets

In a quiet day for US data, Treasury Secretary Timothy Geithner has defended the dollar as the world reserve currency, a day after China called for it to be replaced. Pointing to the ongoing global financial crisis, China's Central Bank governor, Zhou Xiaochuan called for a new reserve currency run by the International Monetary Fund.

Euro - European Markets

Following yesterday's report that showed dire figures about German business confidence, German consumer confidence has declined for the first time in seven months. Workers are increasingly worried about keeping their jobs amid the worst recession since World War II, GfK AG's confidence index for April shown.

According to the Dutch Central Bureau for Statistics, the Dutch economy shrank 0.6% on the year in the fourth quarter. In line with estimates, the Dutch economy in the fourth quarter contracted 1% from the previous quarter, according to the second estimate, which is a downward revision of 0.1 percentage point compared with the first estimate.

Spanish new housing starts fell 42% last year as a decade-long housing boom went bust, data from the country's Housing Ministry has shown. Housing starts fell to 360,044 last year, from 615,976 in 2007. The resulting decline in housing investment pushed the wider Spanish economy into recession at the end of last year.

A report from Statistics Denmark has said the Danish seasonally adjusted jobless rate climbed to 2.5% last month from 2.3% in January. The figure, which is in line with forecasts, shows that Denmark's unemployment rate rose in February for the fifth straight month. Denmark's jobless rate has climbed steadily since September, when it was 1.7%.

Italian business confidence continued to fall in March, staying at its lowest level since records began in 1991, with recent bankruptcies painting a bleak outlook for the economy and exports, research centre ISAE has said.

ISAE said March business confidence in the eurozone's third-largest economy fell to 59.8 from 63.2 in February, well below expectations. A survey of 12 economists polled by Dow Jones Newswires forecast Italian business confidence at 62.7. In the report Thursday, ISAE said sentiment in the consumer goods sector fell to 72.1 from 76.8, while investment goods sentiment slid to 56.5 from 58.7.

Following these somewhat bleak reports, the euro weakened against its major counterparts, before bouncing back slightly against the Swiss franc.

Other Currencies - Highlights

The shekel-US dollar exchange rate rose 1% in morning inter-bank trading and the shekel-euro exchange rate rose 1.68% after the Bank of Israel announced yesterday evening that it would continue to buy US dollars.