Daily currency report

With both the Bank of England and the European Central Bank set to deliver interest rate decisions, the sterling slumped to yet another all-time low against the Euro as financial markets priced in a probable rate cut from the Bank of England. Elsewhere US light sweet crude oil traded over $4 higher, hitting a new record of $112 per barrel following the announcement of a surprising decline in US reserve stocks.

Sterling (GBP)

Better than expected factory output data failed to inspire traders and by the close of play the pound lost ground against almost all the other major currencies. Analysts remain convinced that the Bank of England's Monetary Policy Committee will move to help borrowers by cutting the cost of borrowing to 5 per cent. Such a move would be the third cut in interest rates since early December.

US Dollar (USD)

The US dollar was again sold-off ending the session down against both the euro and the Japanese yen. Weighing on the greenback were comments emanating from the IMF, which forecast a recession in the US over the coming months, albeit a mild one, followed by several months of only moderate growth.

Euro (EUR)

The single currency rose to yet another record high versus the pound and was also well-supported against the US dollar as financial markets appeared to completely rule out any possible rate cut from the European Central Bank over the next few months.

Japanese Yen (JPY)

The new governor of the Bank of Japan, Masaaki Shirakawa, voiced his concern over the state of the world economy, warning that the global credit crunch still threatened to derail growth.