Daily currency report

This week's economic calendar will be dominated by policy meetings from both the US Federal Reserve and the Bank of Japan. With both sets of interest rates currently close to zero, focus is likely to instead be on any news of further, unconventional ways in which the banks can stimulate the world's two biggest economies.

Sterling

The last few trading sessions have seen the pound slump to six-week lows against the US dollar and the euro before eventually rebounding. The root causes of sterling's decline were question marks over the stability of UK banks, the Bank of England's policy of quantitative easing and growing trade and current account deficits.

US Dollar

The greenback starts this week under pressure against both sterling and the euro as markets look ahead to this week's Federal Reserve policy meeting, wondering what next steps the bank can take to help America's ailing economy. With interest rates already set at almost zero, investors will be hoping for more details on how the Fed will continue with its own plans to inject liquidity into markets through the purchase of commercial paper such as gilts and Treasuries.

Euro

Last week was particularly impressive for the single currency as the euro rose to six-week highs against sterling, and also improved significantly versus the US dollar and the Swiss franc. The moves came even though French and German growth figures were negative, while price data was also soft.

Japanese Yen

The yen starts trading under pressure as investors look ahead to this week's central bank policy meeting where the Bank of Japan is not expected to shift interest rates from the present 0.3 per cent.