The euro was flat against the dollar while the yen benefitted from a pull back in risk-taking after Asian share prices plummeted. Risk appetite was subdued in quiet trade as US stock futures came under heavy selling pressure after shares fell three per cent to their lowest close in six weeks. In the UK, sterling edged up from a two and a half week low against the euro and steadied from an early slide versus the dollar in a choppy session devoid of any UK economic reports indicating any movements were due to end of week profit trading.

Sterling

Sterling eased against the dollar and fell more than 1 per cent on the day versus a resurgent yen after a report showing US consumer confidence fell in early August dampened demand for riskier assets.

US Dollar

The US dollar extended losses against the yen after a government report showed that US consumer prices were flat in July over June but had fallen over the past 12 months by the most since 1950. Consumer price data for the month of July provides a compelling argument for why the Federal Reserve is in no rush to raise interest rates.

Euro

The single currency had continued to rise after last week's announcement that France and Germany have exited the recession. Over the weekend, falling stocks have continued to weigh on risk appetite and stalled the euro's rise. As such the single currency is likely to continue to be driven by sentiment based on equity movements.

Japanese Yen

The yen rose hitting its highest in more than two weeks against the euro, as weak US consumer morale clouded the outlook for a quick global recovery and spurred profit-taking in commodity linked currencies.