Sterling strengthened for a second day against the US dollar as data showed that U.K. exports helped the economy resume growth in the first quarter, outweighing the biggest slump in consumer spending in almost two years. Sterling also gained against the euro, breaking beyond €1.15/£1 against the single currency as euro weakness gave sterling a boost. The biggest gains were against the South African rand, where sterling surged by nearly 2% against the notoriously volatile currency.

In the euro zone, the euro hit a fresh low against the ‘safe haven’ Swiss franc yesterday on uncertainty over the Greek debt crisis. Greece is very much under the spotlight and yesterday, Greek newspaper reports suggested that the Greek government is considering organising a referendum on additional austerity measures after it failed to reach consensus with the opposition, casting further doubt on the country's ability to tackle its debt crisis. The lack of clear direction over the country’s issues is causing concerns amongst global investors. Despite this, the euro strengthened against the US dollar on rumours that China has been actively buying Portuguese “bail out” bonds.

In the USA, the US dollar had strengthened against the euro on concerns over the Greek debt crisis, but the euro has seen some strength overnight. Data showed that US durable goods orders decreased 3.6% following a 4.1 percent jump in March, falling the most in six months, which did not help the currency. In addition, house prices in the U.S. declined 0.3 percent in March from February, less than the 0.5 percent drop forecast in a Bloomberg News survey. Out later today, we have GDP figures for the USA, so call in now for a live exchange rate.

Elsewhere the South African rand fell to its weakest level in more than two months against the dollar as concern that Europe’s debt crisis is deepening sapped demand for higher- yielding, ‘riskier’ commodity based assets. Australia’s dollar also slipped on a report that the Chinese sovereign wealth fund would buy New Zealand assets.


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