Thin holiday trading contributed to the dollar's near two per cent decline last week against a basket of major currencies. Questions remain as to whether the dollar can stage a recovery. The euro firmed its position after a plethora of good economic data.

GBP
The sterling hit a near two-year high against the dollar, more a function of dollar weakness than the strength of the pound. The prospect of a further interest rate rise has provided the impetus for a rise in British house prices, rising at the fastest annual pace since 2004.

USD
The dollar plummeted to a 20-month low against the euro and a near two-year low against the sterling. The main reason for the dollar's decline was based upon concerns about central banks diversifying their foreign exchange reserves and the currency's narrowing interest rate advantage.

EUR
The euro remained firm after a sustained run of stronger-than-expected economic data. The euro was lifted by an upbeat business sentiment survey that cemented expectations that the eurozone rates will continue to rise into the New Year.

JPY
BoJ Governor Toshihiko Fukui claimed that Japan's economy should continue growing.