The euro continues to dominate headlines as the failure of member states to offer a decisive solution to the ongoing debt crisis continues to heap pressure on the single currency. The euro has slumped to an 11 and nine-month lows against the US dollar and pound respectively. With the IMF warning that Greece looks set to miss its austerity targets and indications that the German banking giant, Commerzbank, may be set to be nationalised, the short-term outlook for the euro is starting to look very bleak indeed. There was better news from the UK as the core rate of inflation was reported to have fallen to 4.8 per cent last month.

Sterling

Sterling hit a nine-month high against the euro as investors continue to dump the single currency. Core inflation data released in the UK was bang in line with market forecasts.

US dollar

The greenback soared to an 11-month high against the euro, with traders opting to back the dollar ahead of the beleaguered single currency. Risk aversion also meant that the dollar was well supported against sterling, posting a new two-week high. Paradoxically, a below-forecast reading of retail sales actually helped the dollar make further gains versus the major currencies as investors were nevertheless attracted to the currency’s safe haven appeal.

Euro

The sell-off of the euro gathered pace as the single currency slumped top fresh multi-month lows against the pound and dollar. The lack of any decisive action to deal with the issue of solvency facing the euro zone has severed to hasten capital flows away from the euro. The IMF added to the pressure by stating that it believed that Greece was falling way short of its austerity targets.

Japanese yen

The yen starts the session up versus the euro and the pound as dwindling appetite for risk continues to support the currency. In data released overnight, Industrial production in Japan was revised below initial estimates for the month of October.

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