Daily currency report

Safe haven positions crept back after a wave of global political instability and last weekend's G8 summit confirming that, although finance ministers agreed that the worst of the recession could be over, it is too soon to be discussing exit strategies from loose monetary policies. This helped the Japanese yen and the US dollar strengthen across the board.

Sterling

Sterling regaining some of the losses seen against the euro in last week's session, although, with the Rightmove house price data released, maintaining these levels could be a challenge.

US dollar

Markets will be keen to follow more conservative trading, in the run-up to this week's FOMC meeting and record T-Bill auction. Although the FOMC is widely reported to leave their interest rates on hold, the main focus will certainly be on any announcements of whether interest rates will remain "low" for the foreseeable future and whether further quantitative easing measures are deemed necessary.

Euro

Jean Claude Trichet warned that governments who have borrowed billions to fight the economic crisis will have no further room for debt and will have to start bringing down their budget deficits accordingly. As well as this, Mr Trichet announced that more needed to be discussed regarding tighter rules and regulations to underpin the global economy, announcing plans that he would lead a call for a new European Systemic Risk Board who would monitor risks to stability, but he did refuse to comment upon whether he would personally chair such a body.

Japanese yen

The yen has risen especially against the euro and the Australian dollar, in the run-up to this week's FOMC meeting stimulating safe haven flows.