Sterling continued to lose ground against the US dollar on increased risk aversion and worries about the UK economy reaching its lowest level since December last year. Wednesday’s Bank of England minutes made it clear that further quantitative easing was likely and increased speculation over a possible interest rate cut from the current 0.5%. Out yesterday were UK factory export order figures which came in weaker that expected. Out today is house purchasing data for the month of August. This may cause significant movement so call in now for a live rate.

In the Euro zone, the euro weakened against the US dollar being down 0.9%- the weakest level since January 2011. It also reached a 10 year low versus the yen. The Federal Reserve’s announcement which hinted that the global economy is headed for a recession led to increased risk aversion which meant that riskier assets such as the euro were sold. Even with Greece repaying two bond coupons at the start of this week, it has still not been enough to ease concern of Greece defaulting, especially when crucial data came in weaker than expected this week. Call in now for a quote.

The US dollar made significant gains against a basket of currencies hitting a 7 month high versus the euro. After the Federal Reserve’s bleak economic outlook, investors retreated to the safe haven US dollar, as is does in times of market turmoil. This weeks Federal Reserve meeting unveiled a strategy called ‘operation twist’ which could potentially boost the US housing sector by bringing down long term interest rates. Many are already unsure if this programme will work. Call in now for a live rate.

Elsewhere, Australia’s dollar depreciated 2.7% against the US dollar. Despite this, Australia’s GDP increased more than expected in the last quarter, due to a rise in consumer spending. The New Zealand dollar also extended losses versus the greenback as China’s manufacturing figures are predicted to be weak for this month. Call in for a live quote.

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