The sterling and Yen remained the session's biggest winners, expanding on gains made late last week, as the market anticipated a further rate cut to be made by the Federal Reserve. The euro also posted slight gains against the dollar as last week's Société Générale "rogue trader" scandal was largely overshadowed by US interest rate speculation.

GBP

The sterling enjoyed another day of healthy trading continuing recent gains, in particular against the dollar as traders sold off greenback positions in expectation of an interest rate cut by the Federal Reserve. Bank of England's MPC member, David Blanchflower, said that UK interest rates were "restrictive" - as one of the less aggressive members of the MPC ? these comments will no doubt start speculation of a further rate cut by the Bank in February.

USD

The dollar continues to trade under continuing fears of a recession, retreating against all major currencies with losses compounded by new home data which was revealed to be down by 4.7 per cent, further fuelling expectations of a rate cut.

EUR

The euro trading continued where Friday's session left off remaining relatively flat against most major currencies. By session's end, the euro had made some moderate gains against the dollar - primarily a consequence of across the board weakness in the greenback.

JPY

Despite continuing turmoil in the Asian stock markets and fears of a Japanese recession, the yen enjoyed its third successful day of trading in a row. With little confidence in the equity markets, investors look to make short term gains in carry trades continuing to keep the yen buoyant.