The dollar continued to improve on recent gains on the euro on opinion that the European Central Bank's monetary policy outlook will remain held back by the deficits in a handful of eurozone countries.

Sterling

Rating agency Standard & Poors delivered an assessment that UK banks are no longer among the world's most stable and low risk as the economy stagnates. The news saw investors retreat back out of the currency as recently revived sentiment diminished rapidly.

Euro

The euro fell to a new six-and-a-half month low against the greenback and, at one point, was at over five-month lows against the pound, as any support for the single state currency was again hard to find. The euro continues to come under pressure as Greece and Portugal's budget crises encourage a retreat from riskier assets.

US dollar

The dollar's fortunes picked up towards the end of the day as wider positive sentiment soured and reduced demand in higher yielding assets. The dollar continued making its gains on the euro backed by the view that the European Central Bank's monetary policy outlook will be likely held back by the deficits in a handful of Euro Zone countries.

Japanese yen

The Japanese currency benefited from an increase in edgy sentiment. Japan's industrial production rose and unemployment fell in December, driven by a rebound in exports - although this is now somewhat threatened due to their appreciating currency.