Sterling fell against the US dollar yesterday, coming under pressure after figures showed that the UK economy contracted by more than expected in the final quarter of last year. With GDP figures showing a 0.2% contraction against an expected drop of 0.1%, there were market concerns that the Bank of England would look to ease monetary policy further. Minutes from the Bank's last meeting showed that further asset purchases were “likely”, which essentially means definitely. Sterling made some gains against the euro as investors became concerned that the ECB would have to write down holdings of Greek debt. Call in now for a live exchange rate.

In the euro zone, the euro regained ground against the US dollar after the Federal Reserve pledged to maintain a 'highly accommodative' stance to monetary policy over the next 2 years. Whilst Germany released some positive economic data yesterday, there is still concern that there has been no formalised agreement on the euro zone crisis. Until this happens markets will remain very jittery.

In the USA, yesterday saw the announcement by the FOMC – or US equivalent of the Monetary Policy Committee. It pledged to keep interest rates at between 0 -0.25% until at least mid-2013. In addition, figures showed that output at US factories rose by 0.9% last month – the highest gain since December 2010 – further delivering on the recent positive run of US economic data.

Elsewhere, the Japanese yen fell off yesterday after figures showed that the country had lodged the first trade deficit since 1980. This prompted many investors to unwind holdings in the Japanese currency – traditionally a haven for global investors, backed by the long term trade surplus. Call in now for a live rate.

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