The pound looks to be on a relatively strong footing versus the other major currencies while the Japanese yen looks set to register multi-month lows against an array of different currencies.

Sterling

The pound edged slightly lower against the dollar and euro in spite of better than expected data from the retail sector. Economists have cited heavy discounting by retailers as the reason for the improvement. The pound's gains were nevertheless capped as British business investment fell at its sharpest annual rate since 1991.

US Dollar

The US dollar reached a three-month high against the yen even after US Federal chief Ben Bernanke warned that unless government efforts succeed in restoring financial stability, the US recession could last into 2010. Mr Bernanke also stated that as long as the Obama Administration and the Central Bank can restore some measure of financial stability, 2010 could be the year of recovery. In its attempts to revive the economy, the Fed has cut its interest rate to nearly zero, while the Obama Administration has signed a $787 billion economic stimulus package.

Euro

Foreign trade dragged down Germany's gross domestic product in the final three months of 2008 which ultimately reduced Europe's largest economy to its worst quarter since its reunification in 1990. The Federal Statistics Office stated the economy contracted by 2.1 per cent in the final quarter of last year. However, there was little change in the value of the euro as small improvements were seen in the construction and retail front.

Japanese Yen

Recent trading sessions have seen the Japanese yen take a battering. The cause of the fall was export data showing a record decline of 45.7 per cent in January from a year earlier. The yen is also suffering from political instability, especially after the resignation of Japan's Finance Minister.