After hitting a one week low against the US dollar, sterling has fought back to steady itself against both the greenback and the euro. Meanwhile the dollar and the yen have been benefiting from negative data which has caused investors to turn away from riskier assets.
Pound Sterling – UK Markets
Sterling edged up against the dollar this morning to recover from a one week low caused by weak UK consumer confidence. The pound plummeted to USD1.594 earlier in the day following the data, traders then appeared to shrug off the figures and hoisted the currency up 3% to USD1.604.
UK currency also rose against the euro to trade at 1.116 but these gains were capped due to unease about the British government’s debts.
US Dollar – US Markets
The USD advanced against most of its counterparts except the yen yesterday, as a slew of negative data reduced appetite for riskier assets, and investors turned to the safety of the greenback and the Japanese currency.
However, sterling made progress today to hold the dollar at 0.626 and the greenback is floating around 0.698 versus the euro.
Euro – European Markets
The euro fell half a percent to 89.35 pence earlier today despite the pound having been weakened by poor UK consumer confidence data.
The European currency remains pressured by renewed credit concerns as Iceland face a downgrade on it’s credit rating. However, the euro was unmoved by data showing that unemployment in Germany unexpectedly fell in December, a sixth consecutive monthly decline.
Other Currencies – Highlights
The Japanese yen traded near a two-week high against the dollar as disappointing US Pending Home Sales data signaled an uneven economic recovery in the States.
The yen traded early this morning at 91.64 per USD from 91.71 yesterday when it declined to 91.26, the lowest level since Christmas day.