Daily currency report

The sterling's slide against the US dollar accelerated as traders sent the pound tumbling to a 23-year low against the US dollar. The moves served to underline the fact that markets remain unconvinced by the government bank rescue plan, instead, investors have preferred to focus on downside risks to the economy such. Elsewhere, the Bank of Japan concluded its two-day monetary policy meeting with an announcement that interest rates would be kept on hold at 0.1 per cent.

Sterling

The pound came under renewed pressure as it becomes increasingly evident that a government rescue package for struggling British banks has failed to reassure investors or stem losses in banking stocks. In separate news, Bank of England's minutes of this month were published, cementing expectations that rates are set to hit zero sooner rather than later.

US Dollar

The greenback soared against the pound as investors opted to pull out of sterling denominated assets in favour of the relative safety of US Treasury bonds. Against other currencies, however, the dollar performed less impressively, failing to make inroads against the Euro and also sliding to a 13-year low against the Japanese yen.

Euro

The single currency rose against the pound and held steady versus the greenback even though economic data from the eurozone continued to disappoint. However, news that Germany sees its economy's performance in 2009 to be the worst in 60- years is likely to increasingly pressurise the euro.

Japanese Yen

The yen continues to strengthen across the board as the Bank of Japan opted to hold interest rates. Unlike the UK however, a strong domestic currency spells bad news for the world's second largest economy, and the Bank of Japan governor, Masaaki Shirakawa, was moved to comment that the yen's rise is one of the principal causes of a worsening economy in Japan.