Daily currency report

The dollar edged up against a basket of currencies. Meanwhile, UK data hardly showed any signs of improvement, bringing closer the possibility of a Bank of England rate cut.

Sterling (GBP)

The pound fell again against the dollar. British manufacturing output prices fell in August at their sharpest rate since records began in 1986 because of lower petrol and scrap metal prices. A drop in factory input costs suggested that UK price pressures may have peaked, a notion that would indicate an imminent interest rate cut by the Bank of England.

US Dollar (USD)

The US Treasury's plan to put the two government sponsored enterprises under government safeguard has been largely cheered by financial markets. The move has strengthened investor confidence and will ensure the seamless operation of the two mortgage firms and ultimately contribute to a recovery in America's troubled housing market. Overall sentiment remains strong for the US currency, despite ongoing worries about the health of the US economy.

Euro (EUR)

The euro bounced back from an 11-month low against the dollar. Meanwhile, chairing a meeting of central bankers from around the world, the President of the European Central Bank Jean-Claude Trichet claimed "global central banks expect the world economy to re-gather strength after a slowdown". Mr Trichet went on to say "...we see at the level of the global economy that growth remains positive and significant and that there will be a slowing down of growth followed by some picking up...".

Japanese yen (JPY)

The yen fell by the most in three months against the euro and dropped versus the dollar as the US government's takeover of Fannie Mae and Freddie Mac prompted investors to buy higher-yielding assets. Continued strength in stocks and improving risk appetite should continue to keep the yen under pressure across the board.