Sterling faced heavy selling pressure following the release of a report from credit rating agency Fitch which labelled tackling the UK's fiscal deficit as "a formidable task". The report as raised questions about the sustainability of the UK's coveted AAA credit rating. As a result the pound was hit hard across the board. Elsewhere the US dollar continued to hold onto safe haven gains, and was further bolstered by upbeat comments from Federal Reserve chief, Ben Bernanke maintaining that a US recovery remains strongly on track. The euro found some support as Financial Ministers within the eurozone met to discuss their collective bailout plan for the troubled union, with the group calling for governments to continue their extensive austerity measures.

Sterling

Sterling fell following further comments by rating agency Fitch, who once again underlined the jeopardy the UK's sovereign debt rating faces. Fitch highlighted how Britain's new coalition government's austerity measures might not be extensive enough to tackle Britain's rising debt.

US Dollar

A largely uninspired day of trading saw the US dollar trade in relatively tight ranges.

Euro

Tensions within the eurozone continued to keep the single currency under pressure. Although a meeting of EU financial ministers gave the currency some sense of stability, domestic tensions within Spain and Denmark kept the single currency vulnerable and acted to prevent any significant strength. Spanish Unions and nearly 40,000 Danish workers took to the streets against perceived overly extensive austerity measures imposed by the governments in order to tackle their heady debt, with Spanish civil servants for one facing a five per cent wage cut.

Japanese Yen

The yen saw some weakening following waning risk aversion in Asia with investors ploughing into rising equity markets. The yen's decline was helped by machinery orders beating market expectations, an especially pertinent release as is seen as a good gauge for corporate spending.