Daily currency report

The dollar tumbled to a 26-year low against the sterling, a 17-year low against the Australian dollar as well as almost hitting an all-time low versus the euro.

GBP
The sterling surged to its highest level against the dollar in more than a quarter of a century as strong British pay numbers bolstered expectations that UK interest rates are set to rise further. Average earnings in Britain rose by 4.6 per cent in the three months to February. This, together with Tuesday's core inflation data, has prompted traders to price in at least a quarter point hike in May.

USD
Dollar weakness continues to dominate trading as the greenback slid to a series of lows across the exchanges. Economists are growing increasingly worried that housing sector concerns will feed through into a full-blown economic slowdown. There is a growing feeling that the Fed will therefore be obliged to ease monetary policy in the not-too-distant future, and this sentiment is partly responsible for the dollar's decline.

EUR
The euro remains well supported across the exchanges, hovering near an all-time high versus the yen and two-year highs versus the US dollar. Many politicians are concerned that the high value of the euro could eventually damage Europe's export industries by rendering them uncompetitive.

JPY
BoJ Governor, Toshihiko Fukui, remained upbeat on the economy in a speech made to BoJ branch managers. However, his comments had little impact on the value of the yen, with traders electing to borrow in the currency and invest elsewhere.