Daily currency report

In another hectic day on the currency markets, Asian central banks embarked on a day of intervention as inflation, social unrest and plunging stock markets weighed heavily on currencies. The British government also attempted to ease economic woes with a 1.6 billion package of measures to boost the collapsing housing market, but the move did little to ease the sterling's slide as claims that Britain is sliding into a recession gained momentum.

Sterling (GBP)

Despite Gordon Brown's efforts to ease financial woes with a rescue package for the housing market the sterling continued to plummet against most currencies as fears the country was sliding into a recession were compounded by yet further poor economic data.

US Dollar (USD)

Despite weaker than expected manufacturing and construction data, the dollar continued on its recent surge as more investors looked to dump currencies like the euro and Australian dollar on a soaring global economic outlook. The oil prices dropped a further $5 to below $110 per barrel.

Euro (EUR)

The single currency continued its recent path as it breached seven-month lows against the dollar and five-month lows against the yen, while reaching fresh all-time highs against the sterling. The move against the sterling can be attributed to traders believing that the health of the UK economy is worse than that of the eurozone.

Japanese Yen (JPY) - Asian markets

Asian currencies continued to decline despite intervention from some central banks. The main reason for the decline has been speculation that investors are pulling out of emerging markets amid the current global economic slump. It is likely that due to a changing sentiment towards the dollar, investors are pulling funds out of Asia and investing in the US.