Sterling trimmed losses after the Bank of England's July meeting minutes showed a unanimous decision not to extend its asset-buying programme, which was seen as more bullish than market expectations. The euro fell to session lows against the dollar after US stocks opened lower and disappointing industrial new orders were published. Across the pond the dollar drifted higher against the euro while the yen edged up as risk aversion appetite dampened optimism about the global economic recovery.

Sterling

Sterling rose after the Bank of England's July meeting minutes were released, lifting the pound against day lows against both the dollar and the euro. Overall the pound's position remains precarious as more quantitative easing remains a possibility while investors are still concerned over the UK's rising public debt.

US Dollar

The dollar crept up against the euro, as US stocks edged higher. Ben Bernanke completed his two day testimony echoing most of what was said in day one, announcing that unemployment is likely to remain high into 2011 and warned that this could undermine consumer confidence thus potentially derailing any recovery.

Euro

The euro dropped against the dollar in mid session trading before recovering as Euro-zone industrial new orders disappointed. Orders dropped 0.2 per cent month on month and 30.1 per cent over the year. Markets however, had limited reaction to this data, either showing how little investors are surprised by weak Euro-zone data or just how focused markets are on sentiment that is driven by equity movements.

Japanese Yen

The yen dropped sharply across the board, undercut by expectations of investment trust flows out of Japan this week as gains in the euro set off automatic sell orders in the other yen pairs.