Daily currency report

Sterling rose against the US dollar and the euro. With no data of note released, favourable market movements saw the pound improve. Elsewhere, the US dollar opens up much stronger than markets had expected despite the dismal existing home sales figures for December while in the eurozone, the euro pressure was relieved after a Greek bond auction was well received. From the other side of the world, the Japanese yen jumped to one-month highs against the US dollar, which supported it in many of the major crosses.

Sterling

Sterling managed to benefit from the euro/dollar movements, and with no local economic data due out on the calendar, sterling improved particularly well against the US dollar.

US dollar

The greenback is still under some pressure from last week's proposal to tighten regulations in the US banking sector. Nevertheless, investors were focused on existing home sales that came in a little worse than expectations falling to 5.45 million compared to an expected improvement of 5.90 million which had been forecast.

Euro

The euro edged higher against the US dollar after news that efforts to reduce level of debt in Greece had begun successfully. Investors fled to buy the Greek government's first bond issue of the year. The auction was a success and alleviated immediate pressure on the euro in trading.

Japanese yen

The yen is down against all major currencies on a combination of factors including concerns that the Bank of Japan is about to increase its quantitative easing measures to help an economic recovery. There was no change to monetary policy, but confirmed that deflation will be milder than originally thought.