The Swiss franc surged across the board and is clearly the star performer in currency markets right now. The “Swissie” is usually favoured by investors in times of uncertainty and recent global risks have significantly enhanced the currency’s allure. Furthermore, the Swiss economy is performing relatively better than its rivals although a stronger franc may prompt intervention action from the Swiss National Bank if demand for Swiss exports slows sharply in 2011. The eurozone crisis is showing no signs of abating and subsequently the “Swissie” rose to yet another all-time peak against the single currency. The franc also posted a new record high against the pound after a disappointing downward revision to Q3 UK growth pressured sterling. Surprisingly, the US dollar, although steady against the euro and pound, fell sharply against most rival currencies after US growth figures suggested that the US Fed may still need to continue artificially stimulating economic activity. The yen also posted noteworthy gains against the greenback despite a Japanese market holiday keeping local traders quiet.

Sterling

There was more bad news for sterling after minutes from the Bank of England’s monetary policy meeting earlier this month revealed another three-way split. The news was another blow for the pound, and while heading into the holiday season, sterling reached another all-time low against the Swiss franc while clocking new three-month lows against the US dollar.

US dollar

The dollar fell to the negative side of parity against the Australian dollar and slid dangerously close to an all-time low versus the Swiss franc after investors concluded that the US Fed will still need to pump more liquidity into the economy.

Euro

Although the outlook for the euro remains bleak as the eurozone sovereign debt saga rumbles on, the single currency did manage to post small, but noteworthy gains against the US dollar during trade. The Greek government passed its 2011 budget despite widespread criticism, which will keep rating agencies at bay for now. Furthermore, China suggested that it may actively buy up peripheral euro area debt in order to help ease pressure on debt burdened member nations such as Portugal.

Japanese yen

A bank holiday in Japan meant that there was no local activity to speak of, however, the yen still managed to firm against major rivals such as the pound, US dollar and euro. Most notably, the yen reached almost two-month highs against the under fire pound with risk aversion in Asian markets also a contributing factor.

Travelex Global Business Payments Malta, freephone: 800 733 22, www.travelex.com/mt/

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