Markets were sufficiently spooked to see more inflows into safe haven currencies such as the dollar and yen and are likely to remain jittery after military actions in unstable regions such as the Middle East and North Korea in recent weeks. Fitch ratings agency downgraded Spain's credit rating to AA plus from AAA. The ratings agency cited Spain's poor growth prospects as a result of the severe austerity measures that the government plans to implement in order to reduce its debt. As a result, this put fresh downward pressure on the euro, which extended its longest monthly drop versus the dollar in 10 years.

Sterling

A rising dollar was the pound's main threat as the greenback remains the currency of choice by traders. However, sterling fared better against an ailing euro, which saw it test one-month highs against the single currency.

US dollar

The US dollar continued to be supported by safe haven inflows into the currency. The recent upbeat pace of economic data showed no signs of letting up, prompting speculation that the Federal Reserve may soon increase interest rates lending the greenback further support.

Euro

Market conditions look set to remain volatile as debt fears continue to dominate, leaving the euro vulnerable against other majors. Month end positioning saw it finish last week off recent lows but, given the weight of sentiment against the single currency, fresh losses could still be seen in the short term.

Japanese yen

The yen's movements were once again dominated by safe haven plays, but flows were exacerbated by growing tensions between North and South Korea.