With global markets closed throughout most of last week, thinner than usual market activity allowed for distinctly jumpy trade and exacerbated volatility. The main benefactor of this was the greenback, moving to multi-month highs against a basket of currencies. Whilst the euro fell to a three-and-a-half-month low against the US dollar, generally higher global stocks still encouraged trade into riskier assets such as the single currency. Despite this, sterling was perceived as too much of a risk, reaching two-and-a-half month lows against the greenback and facing heavy selling pressure as markets anticipate a heavy economic calendar.

Sterling

Although the headline decline against the US dollar by year end saw sterling fall to two-and-a-half-month lows against the greenback, the very fact that sterling ultimately appreciated against the greenback over the course 2009 can allow for some sense of positivity into sterling moving into 2010.

US dollar

The US dollar continues its trend of trading higher following Federal Reserve chief Ben Bernanke's comments over the weekend supporting the belief that the FOMC could be close to raising interest rates from historic lows. Mr Bernanke stated that he was confident that the Fed will be able to withdraw its extraordinary support for the economy when the time comes.

Euro

The euro fell broadly against a resurgent greenback as investors continued to plough out of the riskier single currency. The moves followed a wave of downgrading and revised sovereign debt ratings into major players in the eurozone during the latter part of 2009.

Japanese yen

While the greenback was the main benefactor of exaggerated trade in thin year end liquidity, the yen was one of the main losers. The Japanese currency depreciated to three-month lows against the US dollar.