Daily currency report
Sterling (GBP)
The sterling lost further ground against the US dollar as economic data continued to disappoint. According to the British Bankers' Association, net mortgage lending collapsed as approvals moved to a series of record lows. The CIPS PMI manufacturing survey and the construction survey also fell to record lows, which, according to economic analysts, have increased the chance of an interest rate cut by the Bank of England this week.
US Dollar (USD)
The greenback continues to impress on the exchanges as the US congress finally agreed to pass the Treasury's proposed $700 billion rescue package for the ailing financial system and the economic outlook for the rest of the world continues to deteriorate. Nevertheless, the dollar's recovery, while impressive, is nevertheless somewhat fragile as the US economy is by no means out of the woods.
Euro (EUR)
The euro fell to a 13-month low against the dollar, multi-month lows against the pound and the weakest in two years versus the yen as the deepening credit crisis prompted European governments to pledge bailouts for troubled banks and protect depositors. BNP Paribas will take control of Fortis's units in Belgium and Luxembourg after government efforts to ensure the company's stability failed, while Germany's government and financial institutions agreed on a €50 billion rescue package for Hypo Real Estate.
Japanese Yen (JPY)
The yen continued its remarkable progress, rising significantly against all the other major currencies. The yen jumped as the same market conditions that are wreaking havoc in Europe and the US, are benefitting the Japanese currency.