Daily currency report

The pound and the dollar both slipped back against the euro as fears of a Greek default subsided, at least in the short term. Meanwhile, UK inflation figures came in pretty much in line with expectations causing the pound to slip back after fears that they may have come in nearer four per cent proved unfounded. Sterling edged higher against a broadly weaker dollar, tracking a relief rally in euro/dollar as investors trimmed short positions in the single European currency. The euro was up against the dollar, helped by an above-forecast German survey and as investors concluded much of the bad news on Greece's public finances was priced in for now.

Sterling

The pound slipped against the euro with the single currency gaining broadly as the market took the view that its recent sell-off had gone far enough now. However, this wasn't the case against the US dollar. Sterling edged higher against a broadly weaker dollar, tracking a relief rally in euro/dollar as investors trimmed short positions in the single European currency.

US dollar

The dollar was the main casualty of a switch to the risk-on trade, losing ground against a basket of its peers. The greenback was down against both the euro and sterling. Gold rose almost two per cent hitting a two-week high while the euro also found some breathing space as it won respite from recent hefty losses against the dollar.

Euro

The euro extended gains against the dollar as stocks rose amid renewed risk appetite. The single currency was also up against both the sterling and Japanese yen as expectations that European finance ministers would not say anything new on solving Greece's debt woes prompted traders to trim their short positions. However, many investors remained cautious about buying the single currency on uncertainty that debt problems in Greece will be resolved quickly.

Japanese yen

The Japanese yen ended on the backfoot against a basket of currencies notably against the US dollar and euro. A return of risk appetite, as always, hurt the safe haven currencies and saw the yen post gains across the board.