Daily currency report

The sterling began the week slightly lower against the dollar and is still strong versus the euro and the yen.

GBP
The sterling fell to a two-week low versus the dollar, dropping further from recent 14-year peaks on uncertainty over Britain's interest rate path. The sterling's losses have come following the minutes of the Bank of England's January meeting last week which showed a 5-4 vote for a surprise interest rate hike, a much closer outcome than the forecast 7-2 split. Having said that, the sterling does remain on a very strong footing against all other major currencies.

USD
The dollar made a slight recovery against the pound but is still near a 14-year low. However, it has extended its recent gains against the yen, climbing to its highest level since December 2002 following solid economic data late last week.

EUR
The euro began this week relatively unchanged versus the dollar but still extremely weak versus the pound. The ECB president defended himself on Sunday from criticism from French politicians that the central bank was not paying enough attention to creating jobs and growth. Leading candidates in the French presidential race have stepped up their campaigns, with the euro's poor performance and slow eurozone growth being high on their agendas.

JPY
The yen fell to near five-year lows versus the dollar and is still at seven-year highs against the pound. Backers of the yen will be hoping that in the next few months the BOJ follows their recent interest rate increase with further hikes.