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Mid week, the yen eased marginally after disappointing Japanese data suggested the country needed more time to get its economic recovery back on track, though the currency soon recovered its losses on buying ahead of a market holiday.
Japanese industrial output fell 0.3 percent in March compared to the previous month, weakening the yen against the dollar and the euro.
The yen vaulted against the dollar and the euro on the last trading session as speculation intensified that China might move soon to allow its currency to trade more flexibly.
The state-run China Securities Journal fanned talk of an imminent revaluation by saying deepening reforms of commercial banks and the foreign exchange market have created conditions for China to adjust the yuan's trading band.
The yuan, which has traded in a band of 8.2760 to 8.2800 to the dollar since the 1997-98 Asian financial crisis, spiked briefly to a high of 8.27, before settling back. However, the Chinese central bank reiterated that there was no change in currency policy ahead of next week's Labor Day holiday in China and Golden Week holidays in Japan.
In the coming week, Chinese finance chief Jin Renqing will meet counterparts from Europe and Asia, including Japan Finance Minister Sadakazu Tanigaki, at the annual meeting of the Asian Development Bank next week.
Range for this week: Y104.00-Y107.00
Sterling
Sterling maintained a strong foothold against the dollar and the euro as a broad-based slide in Europe's single currency overshadowed soft data on the UK housing market.
The British Banker's Association said 65,635 loans had been approved in March 2005 compared to 47,365 a month ago and 97,852 in the same month a year earlier. The association said despite the March recovery it was too soon to say whether the housing market, which has slowed over the last six months was picking up.
Meanwhile markets shrugged off a survey showing UK consumer confidence worsened in April. The data comes less than a week before an election when the ruling Labour party vies for a third successive term on the back of its economic record.
The Bank of England's Monetary Policy Committee meets on May 6 and May 9 to discuss interest rates. However, it is largely expected to leave interest rates unchanged at 4.75 percent.
Range for this week: $1.8850-$1.9150
HSBC
