Daily Currency Report

The pound held near a seven-week low against the Japanese yen, which in turn stayed close to 11-week highs versus the dollar after a major rally last week as investors rushed to cut exposure to yield-dependent carry trades.

GBP

The sterling hit two-and-a-half-month lows against the yen and the euro, buckling under pressure from investors unwinding long positions in relatively high yielding currencies. The pound also fell sharply against the dollar in spill-over selling from last week's major yen rally as investors rushed to cut exposure to yield-dependent carry trades.

USD

The US dollar continued to bounce around as the currency yielded to carry trade flows that have wreaked havoc in the FX market for most of last week.

EUR

The single European currency hit seven-week lows against the yen as the cutting back of risky carry trades reverberated around the market. It was only just over a week ago that the euro hit an all-time high against the yen since its launch in 1999 and many investors had expected it was only matter of time before the euro cleared psychological high figures. Now with the yen back on track, the euro slid well back below these all time high levels.

JPY

Last week was the best week for the Japanese yen in 14 months and the worst one for the nation's benchmark stock index in eight months. The yen continued its surge, striking a three-month high against the dollar as another wave of investors rushed to reverse bets against the Japanese currency with the market still anxious over tumbling global stock markets.