Daily currency report

The euro hit a two-week low against the dollar and yen as a slide in oil prices and global stocks along with doubts about the strength of a US recovery prompted investors to cut exposure to risk. The yen, which usually gains when investors grow nervous, rallied across the board, while higher-yield, higher risk currencies such as the Australian dollar retreated from as much as 10-month highs against the greenback. Meanwhile, the pound extended losses against the dollar, hitting its lowest level in a month as weak equity markets dented perceived higher risk currencies.

Sterling

Sterling fell broadly, hitting its lowest level in a month against the dollar as falling equities and oil prices encouraged investors to shun perceived higher risk currencies. The pound was also dented by an earlier survey showing a fall in UK house prices, highlighting concerns that the UK economy may not be recovering as well as previously hoped.

US dollar

The US dollar pared gains against the euro after data showed New York state factory activity rose by 12.08 in August much more than expected, indicating growth for the first time since April 2008 and signalling manufactures could lead the world's largest economy out of the worst downturn in 70 years. This stemmed the flow of safe haven purchases.

Euro

The single currency continued to make gains against the pound as parts of the eurozone pull out of the global recession.

Japanese yen

The yen fell, retreating from it highest levels this month against the dollar and the euro and losing ground against commodity-linked currencies, although twitchy Asian share markets made trading choppy. Data showed Japan has come out of recession after its economy grew by 0.9 per cent in the April-to-June quarter.