The woes that have befallen financial institutions continued as the world's second largest bank, Citigroup Inc. had to go begging to the US government for more than $300 billion, the latest bailout in a sector crippled by exposure to toxic mortgage debts and a crumbling economy.

Sterling (GBP)

The National Institute of Social and Economic Research stated that Britain's economy will shrink by 1.5 per cent next year and unemployment could rise to 2.5 million in 2010. They also stated that inflation was likely to fall below the two per cent target over the medium term, with a one in 10 chance of deflation, giving the Bank of England further room to cut interest rates over the coming months.

US Dollar (USD)

The dollar edged up and US stocks surged on reports that Barack Obama has chosen the current president of the New York Federal Reserve, Timothy Geithner, to combat the worst US economic crisis in 80 years. However, Goldman Sachs estimated real US gross domestic product would fall by five per cent on an annual basis in the fourth quarter and unemployment would reach nine per cent late next year.

Euro (EUR)

Eurozone inflation is expected to fall sharply as oil prices tumble. A Reuters poll of 36 economists showed inflation falling to 2.4 per cent in the month from 3.2 per cent last month, giving all the ammunition the European Central Bank needs to cut interest rates and attempt to ease the pain of a prolonged recession.

Japanese Yen (JPY)

The Bank of Japan delivered a bleak outlook for the global economy and warned of great strains in global financial markets. Governor Masaaki Shirakawa said he was keeping a very close eye on the risk of deflation, as Japan falls into recession.