Daily currency report

The currency markets weighed heavily on the US dollar, as initially it reached fresh lows against the euro and the yen. There was some respite for the embattled dollar against the sterling however, as the discount lending rate to banks was decreased by the FED in a move not seen since the great depression.

GBP

The pound fell to its lowest level against the euro as the strife faced by US bank Bear Stearns stoked qualms about Britain's financial sector. The US bank is being bought for $2 a share, which not only mirrors the Northern Rock saga but also triggered fears that troubles in the banking sector could also deepen and hurt the wider economy.

USD

Another day and another deluge for the dollar, the worsening financial crisis continues to weigh heavily on the world's most traded currency. Despite the uncertainty the dollar did manage to gain against sterling after the banks lending rate was cut on Sunday but still hit fresh lows against the euro.

EUR

The euro pared gains versus the dollar, beating a retreat from record highs in volatile activity punctuated by jitters over what the central banks might do to quell the dollars sharp decline. There has not been any intervention on the currency markets by any central banks, however they remain on high alert.

JPY

The yen showed a subdued reaction to news that the Japanese government had nominated a former top finance ministry official, Koji Tanami, as its second candidate to run the bank of Japan after Toshihiko Fukui retires. The market seems to be more focused on the US credit crisis than a change at the top for the Bank of Japan.