Daily currency review

The US dollar was the main casualty, falling to three-week lows against a basket of currencies, near three-month lows against the Canadian dollar and, in particular, 15-month lows against the Indian rupee. The fall was on the back of poor employment figures, which were followed by comments from St Louis Federal Reserve Bank president, James Bullard, who said rates may remain low for quite some time. The US dollar was further undermined, as state media reported that China had over taken Germany as the world's largest exporter in December.

Sterling

With no significant data out sterling started the week were it left off on Friday against the USD after weak US employment figures put the US dollar on the back foot. However the gains against the US dollar were capped and the pound was unable to show a similar rally against the euro as investors remained wary of the UK's mounting debt and weak economy.

US Dollar

The US dollar hit a three week low against a basket of currencies, mainly due to the fallout after weak US payroll data last week and the negative effect the figures could have on a possible rate increase at the end of the month. The enthusiasm markets had for a possible rate rise before the non-farm payroll report, seems to have been doused.

Euro

The euro rebounded against the US and Canadian dollars but held against sterling. French industrial output surprised to the upside of expectations coming in at 1.1 per cent for the month of November. The rise was greater than the 0.50 per cent forecasted and gave the single currency an early boost. However, the gains were limited as worries continued about sovereign credit risk in the eurozone.

Japanese Yen

The yen continued to suffer from Japan's new Finance Minister Naoto Kan first press conference last Thursday, Even though Kan toned down his call for a weaker yen, many market players still see Kan in favour of a weaker yen.