Daily currency report

The dollar received a much-needed boost as the Federal Reserve and the Bank of England, in conjunction with the European Central Bank, the Bank of Canada and the Swiss Central Bank have all pledged to inject billions of dollars into the money markets to provide commercial banks with some extra liquidity. The news cheered investors worldwide, and both US stocks and the US dollar rallied on the news.

GBP

The sterling ended up against the yen and steady versus the US dollar and the euro as the coordinated liquidity injection from global central banks helped renew demand for the pound. The announcement was also interpreted as further proof that any easing of monetary policy from the Bank of England's will be much more gradual than many analysts had first thought.

USD

The dollar's initial gains following the Fed's announcement of extra liquidity were wiped out as disappointing trade data and the spiralling cost of light sweet crude oil weighed on the greenback.

EUR

The euro had another good day as an unexpected improvement in German investor sentiment and comments from the Bundesbank President, Axel Weber, appeared to further push back any prospects of an interest rate cut in the months ahead.

JPY

The yen lost ground in spite of the news that Japanese growth held steady in the fourth quarter of 2007. There had been fears that the economy would suffer from a US downturn as the Japanese economy relies heavily on exports to the US. However, economists now warn that Japan is likely to have been hit hard in the first quarter of this year.