Daily currency report

It was hoped that Ireland’s rescue deal would help bring calm to financial markets and European bonds in particular. However, news that Ireland qualified for €67.5 billion of financial aid did little to quash fears that contagion is fast spreading to other peripheral euro zone nations such as Portugal and Spain. The premium markets demand for investing in Spain rose to another record high and should Spain join Ireland on the treatment table, a bailout would reportedly cost around €350 billion, and it is feared that the eurozone may be unable to cough up such a vast amount of funding. Equity markets, global sentiment and the euro tumbled as a result, with the single currency now at two-and-the-half-month lows against the US dollar. Safe haven buying accelerated fast which also helped to prop up the yen and Swiss franc despite another batch of disappointing Japanese and weak Swiss consumer spending figures expected.

Sterling

Sterling has now fallen by over five per cent against the US dollar in November as safe haven buying picks up, US data rebounds and disappointing UK indicators compound to pressure the British pound. More weak UK housing data reinforced expectations that the Bank of England will favour loose monetary policy for some time to come, which makes sterling less appealing to investors.

US dollar

The US dollar rose broadly and advanced by almost two per cent on the day against the euro, as peripheral eurozone debt concerns continue to fester. Tensions in the Korean peninsula are threatening to boil over and as a result, the mood in financial markets darkened even further and global stock markets tumbled.

Euro

The euro remains under heavy selling pressure with fear driving markets into safer assets and investors stepped up risk adverse moves. As a result, the euro tumbled to two-and-the-half-month lows against the yen, nine-week lows against the Swiss franc and new two-and-the-half-month lows against the US dollar.

Japanese yen

The yen fell to new nine-week lows against the US dollar after more evidence pointed towards an economy in decline.

Travelex Global Business Payments Malta, freephone: 800 733 22, www.travelex.com/mt/