The continuing uncertainty surrounding when an actual decision about what investments will be made to support Dubai's banks will be taken, is continuing to breed risk aversion in the market. The US dollar and Japanese yen remain the main benefactors.

Sterling

Although sterling pared losses against the US dollar, rising from three week lows seen previously, the British currency fell to month lows against the euro. This came in the midst of negative local data and a continuing lack of confidence while investors remain uncertain as the Dubai crisis develops. Consumer confidence index fell to -17 in November; the first fall since January of this year.

US dollar

The US dollar fell as concerns surrounding Dubai's debt problems eased and stronger than expected US regional business activity data erased safe haven demands for the greenback. Investors remained cautious after a top Dubai official stated that the central bank will not look to guarantee all Dubai World's debt, allowing the greenback to firm. However, local data also acted to weigh on the US dollar, with US Midwest business activity expanding more than expected, lifting shares and weighing on the safe haven greenback.

Euro

The euro remained firm against a weak sterling, and was largely supported following a wholly positive release of Harmonised Index of Consumer Prices flash estimates at 0.6 per cent year on year. Rising prices could provide an excuse for European Central Bank's policy makers to reverse the bank's ultra loose monetary policy.

Japanese yen

The yen hit 14-year highs against the US dollar and once more safe haven flows continued into the Japanese currency as investors sought more stable investments. The Governor of the Bank of Japan reacted by stating the central bank will have to act decisively in the face of renewed financial market turmoil.