The dollar advanced against the Yen after the Federal Reserve rescued insurer American International Group Inc (AIG), easing fears about the financial system crisis for now. The Federal Reserve said it would lend up to $85 billion to AIG, once the largest insurer in the world, in a two-year plan aimed at saving the insurer from a "disorderly failure" that could damage the global economy. The US action eased worries about the stability of the US financial system, and helped high-yielding currencies like the Australian dollar to rebound from multi-year lows against the yen, which was favoured at a time of heightened risk aversion.

Sterling (GBP)

In the UK markets investors will be looking forward to the release of the minutes from the last Bank of England rate announcement, where the central bank kept rates on hold at 5 per cent.

US Dollar (USD)

Following the collapse of Lehman Brothers, investors had feared AIG would suffer a similar fate and exacerbate the turmoil in the global markets. Yet the overall market remains fragile as the tightness in the US dollar funding persisted in Asian trading, underscoring that the uncertainty about the health of the financial system remained strong.

Euro (EUR)

German investor sentiment on the prospects for Europe's largest economy improved by more than expected in September. The ZEW institute said a separate analysis that came in after the bankruptcy of Lehman Brothers showed that expectations for Germany had not deteriorated as a result of the Lenders collapse.

Japanese Yen (JPY)

The bank of Japan pumped three trillion yen into the market in two moves, after overnight rates jumped above 0.7 per cent, 20 basis points above the central bank's target rate. The Bank of Japan also kept interest rates on hold just as the Federal Reserve did.