Markets started off slowly as they awaited the UK government's pre-Budget report. However, the pound dropped to its lowest level in almost two months against the dollar as, on its release, the pre-Budget report focused attention on the health of the country's finances. Meanwhile, the euro reached its lowest level in more than a month against the dollar as fears about the health of the finances of Greece and Spain weighed on the single currency. The yen rose after Japanese growth was revised sharply lower in the third quarter.

Sterling

Sterling started the day on the back foot against the single currency and actually slid to a near two-month low against the US dollar in the run up to the UK government's pre-Budget report. British finance minister Alistair Darling said that he expects the economy will grow by one to 1.5 per cent in 2010 but admitted that the recession had turned out to be deeper than he predicted in April.

US dollar

US dollar movements were largely dictated by fluctuations in stocks, commodities and risk appetite generally due to the lack of US economic data in the session. The greenback fell against the euro, snapping a three day advance, after investors decided that the greenback rally after Greece's credit rating downgrade, was too far and too fast.

Euro

The euro rose against both the dollar and the pound, recovering from its lowest level in more than a month against the greenback. Investors sensed selling in the single currency had been overdone after Greece's credit rating was downgraded on Tuesday.

Japanese yen

The yen and the US dollar weakened against the currencies of Australia and New Zealand after faster Australian job growth and prospects for higher rates prompted investors to seek higher-yielding assets.