Daily currency report

Sterling was able to claw back some the losses incurred at the start of the week, but remains vulnerable to a further sell-off. US employers only cut 36,000 jobs last month - fewer than markets had predicted.

Sterling

Sterling surprisingly rose after the bad week that the pound had experienced. Sterling saw very little reaction to PPI data which came in at 0.1 per cent where 0.2 per cent was expected. The Producer Price inflation figures were mostly just under expectations. Fundamentally, however, bearish sterling sentiment looks set to continue and forthcoming economic data releases will have to be exceptional if the trend is to be reversed.

US dollar

The dollar reacted negatively to the non-farm payrolls figure, as investors threw their weight behind the more upbeat economic news. Markets had priced in a heavy job loss figure, which never surfaced. Indeed, the non-farm payrolls release came in at - 36,000, while the rate of unemployment stayed at 9.7 per cent. Had bad weather not negatively impacted the release, the figures might have turned positive.

Euro

The euro rose against the yen and the dollar as expectations increased Greece will get assistance, boosting demand for higher-yielding assets. Europe's currency strengthened against 11 of its 16 major counterparts after French President Nicolas Sarkozy said the euro region is ready to rescue Greece.

Japanese yen

The yen strengthened against both the Australian and New Zealand dollars on speculation Japanese companies will bring home overseas earnings before the fiscal year ends this month, while slowing growth in Europe damped demand for the higher-yielding currencies.