Sterling’s early gains against the dollar have been curbed by data showing a fall in UK labour markets. However, minutes from the latest Bank of England policy meeting showed a unanimous vote to pause quantitative easing.

Pound Sterling – UK Markets

The pound had made around a 1% gain against the dollar to trade at USD1.5767 at 0941 GMT as markets saw a return to risk appetite in early trading. However, overall sentiment towards sterling remains shaky following Central Bank minutes this morning, though it could have been worse. MPC voting was unanimous in freezing interest rates and holding off on further quantitative easing measures. Official labour market figures showed that the number of Britons claiming unemployment benefit rose unexpectedly in January by the largest amount since last July. As a result, sterling is currently holding steady at 1.1475 and 1.5772 against the euro and USD respectively.

US Dollar – US Markets

The dollar was down against most major currencies yesterday and things don’t look much brighter today as concerns over Euro-Zone debt problems waned, prompting investors to scale down the retreat into the US currency. A heavy news day is expected from the US today, with the release of the Building Permits at 1330 GMT and Industrial Production at 1415 GMT. The release of the FOMC meeting minutes at 1900 GMT might provide some support for the greenback if there is any sign of monetary tightening happening sooner than anticipated.

Euro – European Markets

The European single currency rose to USD1.3752 at 0955 GMT as concerns lightened over Greece's budget woes and a stronger than expected ZEW result supported the single currency. Worries over a Greek default ebbed away after reports out of Brussels suggested that European finance ministers may start playing hard-ball with Greece, possibly by stripping them of their EU voting powers. Greek unions called off a strike of tax collectors, and farmers began removing barricades and the scale of the country’s problems seems to have finally hit home.

Other Currencies – Highlights

The Yen declined close to its lowest level in almost two weeks against the euro as signs of a stronger global economic recovery and speculation Greece won't need an EU bailout boosted demand for riskier investments. The Yen is at 124.25 against the single currency in today's early trading.