The euro dropped to multi-month lows against the dollar and the pound in volatile trading. Weak German investor sentiment and Greece's dismal fiscal health were still the main drivers towards a heavy sell off of the single currency. The dollar once again benefitted from risk aversion as dollar denominated assets, as well as the safe haven currency itself, were investors preferred choice. The pound held on to its recent gains as UK unemployment and claimant count figures released showed an unexpected fall.

Sterling

The pound hit a five-month high versus the euro as markets still digested the higher consumer inflation figures which raised expectations the Bank of England's asset buying programme would pause next month. Also supporting sterling on was the UK unemployment report and claimant count as both readings showed an improvement.

US Dollar

The dollar rallied across the board hitting a five-month high against the euro as the greenback continued to benefit from risk aversion and widespread selling of the single currency. The dollar also received a boost as investors reckoned the Massachusetts election of a Republican to the US Senate was positive for the dollar as it may see the government rein in spending and narrow the fiscal deficit gap.

Euro

The euro dropped to a five-month low against both the dollar and the pound as Greece's well documented debt problems continued to plague the single currency and resulted in the euro being sold off heavily. Market sources say concerns about Greece and other European state's ability to deal with ballooning budget deficits, together with lacklustre growth in the 16-member bloc may continue to weigh on the euro.

Japanese Yen

The Japanese yen was sold as investors started to take up new positions in the Australian and New Zealand dollars, after a heavy selloff in these currencies was seen.

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