The pound, euro and other currencies regarded as higher risk rose in Wednesday’s trading after Singapore effectively re-valued its currency while upbeat US corporate earnings boosted appetite for risk. The Singapore move was viewed as a mark of confidence in the economic recovery. In the later part of trading the dollar received a boost against the Japanese yen after the release of US consumer inflation and retail sales data.


In the early part of trading, sterling held steady, consolidating recent gains against a weakening dollar after recent robust UK data. However the pound was weighed down by political uncertainty in the run up to next month’s general election as a result of conflicting opinion polls.


The pound then went on to hit a seven week high against the dollar, extending gains as Federal Reserve chief, Ben Bernanke, testified to Congress. This came as a surprise after earlier upbeat US economic data saw a broad improvement.


Corporate earnings were generally up and news on the housing market was encouraging. Inflation figures were released in line with expectations proving the Fed’s approach is keeping a tight lid on inflation. US retail sales figures also beat market forecast, jumping 1.6%.


In the Euro Zone, the single currency still remained vulnerable due to the ongoing issues surrounding the Greek debt and bailout plan. After a short term boost on the announcement of a rescue deal at the start of the week, concerns have re-emerged and could weigh on the single currency for sometime ahead.


Economic data due for release today is light with no local data of note and trade figures the only expected release from the mainland. The lion’s share of data will be from the USA which sees an abundance of releases later today.