Daily currency report

Waning risk appetite played into the hands of the safe haven dollar, as official comments from both Britain and the eurozone did little to support their home currencies.

Sterling

Sterling was not helped by comments from Bank of England member Barker stating that the UK may have a quarter in the coming year where GDP falls, further reinforcing already prevalent beliefs that economic recovery will continue to be fragile. Although she did shy clear of stating a double-dip recession is imminent, her comments did not look to aid an already fragile pound.

US dollar

The dollar once again was the benefactor of safe haven flows, especially against sterling which fell 0.9 per cent against the dollar from the morning's start. The dollar largely maintained its strength throughout the release of several economic reports, with, among others, industrial production figures, which however showed a contraction came in above forecast.

Euro

Despite the hopes recorded in the media surrounding a definitive bailout for Greece, EU members were keen to dispel this belief. The greenback benefited from flows out of the single currency as investors began to speculate once more that a total monetary bailout for Greece was far from being imminent, and worse than this that any potential bailout would not be enough to ease the overall debt crisis the EU is experiencing as a whole.

Japanese yen

Japanese Cabinet policy makers continue to urge the Bank of Japan to ease monetary policy ahead of its two-day meeting. Despite this pressure the fledgling government might be somewhat disappointed. Although it is expected that the central bank will look to loosen monetary policy, some analysts predict that the Bank of Japan will not enact extreme enough measures to dramatically weaken the yen.