Daily currency reports

The focus this week is on interest rates with the Bank of England and the European Central Bank making their announcements.

Sterling (GBP)
Sterling fell to a lifetime low against the euro again with the UK currency pressured by data supporting the view that the Bank of England could cut rates by as much as 0.5 per cent when it concludes its monthly meeting. A Halifax report saw a sharp fall in house prices in March, with the fall on the month the biggest drop for over 15 years.

US Dollar (USD)
The dollar has fallen against the Euro with the minutes of the March interest rate policy meeting indicating the Federal Reserve is very worried about the state of the US economy. The stresses in the housing and financial markets could trigger a prolonged and severe downturn in activity as inflation continues to push higher.

Euro (EUR)
There is little prospect of any change to the interest rate when the European Central Bank meets despite last week's run of weaker than expected activity data. With inflation at 1.5 per cent above target, the central bank is likely to show no signs of softening its tone at the post meeting press conference.

Japanese Yen (JPY)
Masaaki Shirakawa is the new governor of the Bank of Japan. One of his first jobs was to announce that interest rates in Japan will remain unchanged and the yen was supported by speculation that they will be reluctant to cut rates later in the year even as the Japanese economy slows. The yen rose against the dollar and the euro as the appetite for carry trade re-emerged.