Daily currency report

was little movement of note on the exchanges as evidence continues to mount that economic growth around the globe is still slowing rapidly. The Swiss National Bank opted to keep interest rates on hold at 2.75 per cent in spite of the fact that inflation is currently at record levels, preferring to focus on economic growth.

Sterling (GBP)

The sterling begins the session on a reasonably strong footing following comments made by the governor of the Bank of England, Mervyn King, who painted a gloomy picture of the British economy, pointing to rising inflation and slowing growth. However, the sterling drew strength from King's apparent determination to keep inflation under control by increasing the cost of borrowing if necessary.

US Dollar (USD)

The dollar failed to capitalise on recent gains as traders remain uncertain as to the Federal Reserve's next move. The greenback had benefited over the last two weeks from speculation that both the Federal Reserve and the US treasury were set to make a concerted attempt to strengthen the currency. However, over the last two days data has underlined that economic conditions are still deteriorating, making the Fed's next move especially hard to predict.

Euro (EUR)

Market volatility is high in the thoughts of European Central Bank members, dampening the previous notions of a series of aggressive rate hikes. This was backed by ECB council member, Yves Mersch , who stated that there is a possible certainty of a rate hike in July, but downplayed the chances of a sequence of them.

Japanese Yen (JPY)

The yen gained against the dollar for the third consecutive day as traders began to fret that the Philly Fed report will reveal further problems in the US manufacturing sector.