Sterling fell yet again as in the absence of any data of note, comments from Pimco's CEO indicating that the UK would be the country most at risk of losing its triple AAA credit rating saw the pound fall. The euro started the week much as it left off the last, being sold off across the board. The well documented debt issues in some of the eurozone's smaller member states continued to weigh on the single currency but its problems were compounded by a poor Sentix survey reading. It was a completely different picture across the pond as the US dollar continued to enjoy eight and half month highs against the pound and nine month highs against the euro, as investors refused to back these perceived riskier currencies.
Sterling
Things went from bad to worse for the pound. Sterling was down across the board, falling to its lowest level since May 2009 against the US dollar. The afternoon session saw the pound make some ground on loss consolidation orders and what appeared to be technical selling. However, this could be short lived ahead of key UK event risk.
US Dollar
The US dollar is still the currency of choice in the markets. A recent run of positive data, including exceptional GDP growth figures of 5.7 per cent for quarter four, had already given the dollar a high level of support.
Euro
After a week best forgotten the euro remained under significant pressure. The mounting debt problems in the eurozone continued to weigh on investors' minds. The single currency felt further pressure as an EU Sentix survey saw investor confidence fall to -8.2 from a prior reading of -3.7 and upsetting market expectations of a marginal improvement to -3.2 per cent.
Japanese Yen
The Japanese yen remained well supported across the exchanges. The yen enjoyed its position as a safe haven currency amid debt woes in Europe and the consequent inflow into less precarious positions. However, a small amount of risk appetite returned to the markets which saw the yen pare its gains.