Daily currency report

There was another strong performance by the euro which rose up again versus both the US dollar and the sterling. After the sterling's slump and the series of record lows against the euro the British economy is now barely bigger than Italy's. Also in the headlines was the US Senate which blocked the House of Representative's rescue package for the US auto industry.

Sterling

The sterling slumped to a new record low against the euro and a selection of other currencies after weak UK factory orders added to the deteriorating data coming out from the UK economy. The sterling's fall against the euro reflects the weak British fundamentals compared to the eurozone.

US Dollar

The dollar hit a seven-week low versus the yen and a six-week trough against the euro and was also weighed by data suggesting a further deterioration in the world's largest economy. The number of US workers filing new claims for jobless benefits surged to a 26-year high as employers tightened their belts to help deal with the potential and very much expected deep, long recession.

Euro

The single currency hit a six-week high against a broadly weaker dollar with doubts creeping in as to whether the demand for the US currency over the year-end will be as strong as previously thought. Interest rate spreads also moved in the euro's favour after European Central Bank Board member Juergen Stark said that the bank did not have a lot of room for manoeuvre on rates after its cut last week.

Japanese Yen

The yen soared to a 13-year high against the plunging US dollar following the collapse of a US auto industry's bailout. The Japanese currency strengthened against the dollar threatening to further cripple Japan's exporters struggling with the worst global downturn sending the US, Japan and Western Europe into recession.