Pressure on the greenback continued to mount as Q3 GDP figures were revised downwards and a housing survey revealed that prices fell drastically. The US Federal Reserve announced plans to inject a further $800bn into the US economy, this time with the aim of improving credit conditions for businesses and consumers.

Sterling (GBP)

The sterling fell to a session low versus the dollar after Bank of England Governor Mervyn King said the bank may need to further cut interest rates while UK banks may require additional government funds than they have already received. The comments left sterling unable to make gains against the euro as it was rising against a weaker US dollar.

US Dollar (USD)

The dollar fell for a third day versus the euro as the Federal Reserve committed up to $800 billion to thaw credit for homebuyers, consumers and small businesses, reducing demand for the greenback as a haven. Gross domestic product in the US shrank at a 0.5 per cent annual rate from July through September, while consumer confidence surprisingly rose to 44.9. This helped the dollar marginally claw back some earlier losses.

Euro (EUR)

The euro initially came under heavy selling pressure following the news that Germany confirmed that its economy contracted by 0.5 per cent in Q3. Nevertheless, the single currency later recovered as investors reacted to the deteriorating economic outlook in the US. Attention turns to the EC which is set to unveil its plans to boost the flagging European economy. There are hopes that the Commission will advocate a reduction in the rate of VAT in a bid to kick-start consumer spending.

Japanese Yen (JPY)

The yen rose against the euro and the dollar as speculation that the global recession will deepen prompted investors to pare holdings of higher-yielding assets funded in Japan.