The US dollar sets off on a strong footing following a stunning performance that sent the greenback to a five-month high against the euro and a 17-month high against the sterling following negative news from the European market and the further decline in oil prices which are now some 20 per cent lower than the peak reached in June.

Sterling (GBP)

The sterling begins the week at its lowest level against the US dollar since November as investors continued to dump the pound on concerns that the economic downturn is worsening faster than previously thought. Now it seems the combination of rising inflation and slowing growth as a result of the credit crunch are threatening to pull the UK down into recession.

US Dollar (USD)

The US dollar is in a position of strength following last week's stunning performance that has left the greenback at multi-month highs against an array of different currencies. The dollar has greatly benefited from the decline of the euro as investors dumped the single currency following dovish comments from ECB Governor Jean-Claude Trichet and a worsening economic outlook in the eurozone.

Euro (EUR)

The euro slumped to a six-month low against the dollar following comments by Mr Trichet that helped fuel speculation that the eurozone is likely to face the same threats of rising inflation and slowing growth that have beset both the UK and the US.

Japanese Yen (JPY)

The yen remains under pressure, particularly against the US dollar, as speculation mounts that the world's second largest economy contracted by as much as 0.6 per cent in Q2. If confirmed, the data would bring to an end three consecutive quarters of growth that many economists hoped would spell the end of almost a decade of stagnation.