Daily currency report

The pound remains under pressure and has fallen once again to a record low against the euro after a key Halifax report showed a fall in house prices for March. The Bank of England is likely to cut interest rates again this week with some fearing that the UK will follow the US into a potential recession. The European Central Bank also meet this week but there will be little prospect of any policy change at this stage.

GBP

House price data is putting sterling down sharply against the euro and seeing it to lows against the US dollar. The Bank of England meets this week and with house prices still falling and the deterioration in financial and credit market conditions, they are widely expected to cut the base rate by 0.25 per cent.

USD

Relative stability in equity and credit markets is helping keep the dollar on a better footing versus other major currencies, with renewed optimism that the worst of the financial crisis may be over encouraging investors to buy riskier assets.

EUR

The euro rose by more than a cent from the day's lows against the dollar and to a three-month-high against the yen on prospects for steady eurozone interest rates. The outlook contrasts with market expectations for both the Federal Reserve and the Bank of England, which are set to cut interest rates further this month.

JPY

The low-yielding yen continues to suffer as stock markets stabilise and the appetite for in risk taking begins to re-emerge. There is fresh optimism that the worst of the credit crisis may be over, however, Japanese investors will want to keep the yen within recent ranges ahead of this weekend's G7 meeting.