The sterling surged against most of the major traded currencies, while European Central Bank Governing Council member Klaus Liebshcer claimed that he thought the currency market moves over the past week where a cause for concern. Elsewhere, the dollar rose by more than a full cent against the euro after US banking giant Citigroup surprised investors by reporting lower quarterly losses than feared.

Sterling (GBP)

The sterling jumped more than two per cent against the yen and gained healthy also against the euro and dollar. The main catalyst for sterling's renewed vigour was a claim from a UK treasure source that British authorities could announce details of a plan to ease tight conditions in the mortgage market as early as this week.

US Dollar (USD)

The dollar pulled back from a record low against the euro in choppy trading and it seems that with the lack of any major economic data to threaten the latest rebound in the US dollar, the rally could continue this week.

Euro (EUR)

The euro hit a session low against sterling and lost half a cent to the dollar with traders citing growing confidence that UK officials will act soon to help remedy the ailing mortgage market. This week will hopefully see eurozone data shedding more light on the health of the region's economy.

Japanese Yen (JPY)

The yen continued to tumble as the renewed stability on global equity markets raised risk aversion and pushed investors from the safe haven of the low-yielding Japanese currency. With investors willing to take more risks again, the yen is hovering near a seven-week low versus the Australian dollar and a one-month trough versus the New Zealand dollar.