Daily currency report
Sterling
The British pound tumbled against the dollar, falling by 1.44 per cent from the day’s open, as the greenback is seen as the safest bet in the moment.
US Dollar
The US dollar was the biggest winner in the currency markets as the greenback soaring across the board, helped by its rise to fresh 11-month peaks on the euro and advanced further gains against the Sterling.
Euro
The euro unexpectedly plunged to a 10-year low against the safe haven Japanese yen on fears the European Central Bank’s desperate attempts to grease credit markets and stabilise demand for eurozone government bonds is failing. The European Central Bank recently launched its long-term refinancing operation (LTRO), which was designed to offer cheap loans to banks within the region with the ultimate aim of encouraging lending. However, according to data released from the central bank this week, the amount of money being stored with the ECB by commercial banks rose to a record high. Subsequently analysts are now speculating over the ECB’s next move to stave off a credit crisis which may involve a more direct liquidity injection which falls within the boundaries of quantitative easing. Although Italy’s auction of short-term bonds was well received, the country’s attempt to sell long-term debt is another factor worrying investors. As a result, risk appetite quickly dried up, sending equity markets sharply lower. Naturally, demand for emerging market currencies diminished, as did the attractiveness of commodity - and growth-linked investments such as the Canadian dollar.
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