Daily currency report

The US dollar had another tough day, coming under heavy selling pressure providing a small degree of support for the pound and also boosting the euro across the exchanges.

Sterling (GBP)

The pound slump to a new record low against the euro as the RICS house price index hit a 30 year low and a separate survey showed that retail sales also fell in March. The data appears to confirm fears that the economic downturn is deepening at a much faster pace than had previously been thought.

US Dollar (USD)

The dollar fell over the course of trading as investors' worries over a weak dollar were further compounded by Wachovia, the fourth largest bank in the United States, posting a surprise first quarter loss of $350 million, citing continuing credit problems as the primary cause.

Euro (EUR)

Euro-zone industrial output production was up 0.3 per cent month on month and 3 per cent up on 2007 figures. This combined with continued dollar weakness and, European Central Bank Governing Council member, Yves Mersch's comments indicating that the bank has no plans to lower interest rates this year, contributed to yet another show of strength by the Euro. Investors seem to take the relatively safe option of backing in the more stable euro and the closest to a guaranteed return over the course of the year that can be found during such volatility, shying away from higher yielding currencies such as New Zealand and Australian Dollar.

Japanese Yen (JPY)

The Japanese yen benefited again due to activity on the equity markets as the Nikkei share average rose by 0.6 per cent and as a result the yen posted modest gains against a basket of currencies.