Daily currency report

Trading centred on the release of the US non-farm payrolls report. Markets this week will be closely following Bernanke's speech, and also the tone of FOMC minutes. Investors will be looking for clues as to whether a second interest rate cut is likely at the policy meeting on the October 31.

GBP

The sterling was little changed on Friday in choppy trading, as the currency tracked the dollar's movements following a stronger than expected US non farm payrolls report for September. The pound initially dropped against the dollar, but soon recouped losses after the greenback reversed gains.

USD

The dollar resumed its downward trend after a solid US jobs report failed to quell expectations of another cut in US interest rates. Data showed that US jobs growth climbed 110,000 while August's figure was revised upwards to a gain of 89,000. However, concerns still linger that problems in the US housing market threaten to drag the US into recession.

EUR

The strong euro is seen as one factor staying the ECB's hand on further interest rate rises, combined with uncertainty about the economic impact of financial market turbulence. ECB governing board member Lorenzo Bini Smaghi underlined some of the benefits afforded by a strong currency. According to him, the fact that imports cost less helps to keep a lid on inflation encouraging consumption.

JPY

The BoJ will meet tomorrow to review key interest rates. The Bank is widely expected to keep them on hold at 0.50 per cent. Data out such as the ECO watchers survey will indicate any trends within the economy, providing some guidance as to whether a near term hike is on the cards.