Daily currency report

The US dollar fell to yet another all-time low against the euro and also lost significant ground against the Japanese yen. Investors were concerned by the rise in oil prices, which reached another record above $110 a barrel as traders bought oil to hedge against the sliding greenback. Elsewhere, the sterling held steady on the exchanges in spite of a warning from Chancellor Alastair Darling, that the UK is facing its biggest slowdown since the Labour government came to power in 1997.

GBP

The sterling was up against a falling dollar with the pound's strength reflecting doubt on how effective the Federal Reserve's recent liquidity boosting measures would be in fixing US economic problems. The sterling remained relatively steady against the other major currencies including the euro with the currency markets showing little reaction to the release of the UK budget.

USD

The dollar fell to a 12-year low against the yen and hit record lows versus the euro and Swiss franc as doubts grow that the injection of $200 billion into the US economy was too little, too late. Some analysts are already saying that the US has fallen into recession as the housing market crisis deepens and economic growth continues to stall.

EUR

The euro set a new record high against the US dollar buoyed by strong economic data that has further reduced the likelihood of an interest rate cut any time in the near future.

JPY

As the dollar's slide against the yen deepened, pressure continues to mount on the Japanese authorities to step in and protect the key export industries. Weakness in the US dollar is making Japanese goods relatively expensive in the US, and threatens to derail Japan's already fragile economy.