Daily currency report

Sterling fell across the board after the Bank of England announced it would pump more funds into the banking system as part of their asset purchasing programme, citing subdued inflation and fragile financial conditions. The pound fell by more than 2c against the dollar. There was also an interest rate decision in the eurozone and as expected the European Central Bank kept the 16-nation region's main refinancing rate at a record low of one per cent, in line with forecasts.

Sterling

The pound fell from near the highest levels reached against the dollar since October 2008 and dropped versus the euro as the Bank of England increased its asset-purchase plan on concern the recession is deeper than previously anticipated. The decision shocked many investors who had been starting to take a brighter view of the British economy, especially after recent economic data suggested the year-long, steep recession may have ended in the third quarter.

US Dollar

The dollar rose against a basket of currencies, as a government report showing a sharp drop in US jobless claims boosted views that the labour market and the economy were stabilising.

Euro

After the interest rate announcement, European Central Bank President Jean-Claude Trichet said "rates remained appropriate at the current level of one per cent" adding that a fall in consumer prices in the eurozone's recession-bound economy was temporary.

Japanese Yen

The yen kick off firmly following events which saw investors again attracted by its safe haven appeal. However, it later suffered broadly as Asian equities posted strong gains, denting haven demand for the Japanese currency.