Daily currency report

The pound's decline accelerated as unemployment data revealed that the number of jobless in the UK is now at its highest level in more than a decade and the Bank of England also sent a strong signal that more interest rate cuts are on the way. The combined impact has left the pound mired at a six-and-the-half-year low against the US dollar and at another all-time low versus the euro. Elsewhere, the US dollar has continued to make gains across the board as global stock markets remain under heavy selling pressure, with investors concerned about the severity of the global economic slowdown.

Sterling (GBP)

Traders sold off the pound heavily after negative employment data. The sterling's woes were than compounded as the Bank of England released its quarterly inflation report which appeared to pave the way for further sharp cuts in interest rates.

US Dollar (USD)

The US continues to benefit from a deteriorating global economic outlook as investors flock to the relative safety of US Treasury bonds. Treasury Secretary Hank Paulson's policy U-turn spooked investors. The administration effectively abandoned its $700bn plan to buy up toxic mortgage assets from banks and will instead focus its bailout fund on making direct investments in financial institutions and shoring up consumer credit markets.

Euro (EUR)

While the euro remains well supported against sterling, it slid against the US dollar and Japanese yen, as it becomes increasingly apparent that the 15 member trading bloc is also suffering from the global economic slowdown. Indeed, data already released confirms that Germany is now officially in recession.

Japanese Yen (JPY)

The yen remains strong across the exchanges as the deteriorating economic outlook for the world economy continues to deter investors from risky positions. Nevertheless, concerns remain over economic growth in Japan, as reduced global demand and a strong yen may negatively impact the world's second largest economy.