Daily currency report

Sterling fell broadly against both the dollar and euro as investors reassessed their outlook for the British economy while the euro made gains against a basket of currencies, most notably the dollar and the pound. Elsewhere, the dollar is firmly on the back foot as the US currency is under broad selling pressure ahead of the policy statement from the Federal Reserve.

Sterling

Sterling weakened against the US dollar and fell even more sharply against the euro, with the market taking its cue from equity markets to gauge risk appetite. Early losses in UK share prices pushed the pound to lows against the dollar. A British Bankers' Association release showed that mortgage lending by the UK's major banks had returned to levels seen early last year.

US Dollar

The dollar initially made ground as caution ahead of the Federal Reserve's policy meeting saw an inflow towards safe haven currencies. The USD extended previous losses against the euro as flash eurozone PMI data was deemed positive. The market continues to await the outcome of the FOMC meeting and a record $104 billion in US debt issuance this week.

Euro

The euro was the main winner, as it rose against sterling and more than one per cent versus the dollar, extending gains as stabilising equity markets in Europe and the United States briefly dented safe-haven flows into the greenback.

Japanese Yen

The yen rose broadly, hitting a three-week high against the dollar and one-month peaks against the euro and Australian dollar as investors kept cutting bets on riskier assets amid growing doubts about the sustainability of a nascent economic recovery.