Pound surrenders gains over euro

The pound weakened against the euro this morning following an announcement by the CBI that gross domestic product will fall by 3.3% - the most in almost 30 years. The Group of Seven finance chiefs meeting in Rome on the weekend did not refer to the weakening pound, which is down 17 percent versus the euro in the past 12 months. Investors are speculating that this omission may therefore weaken the pound. The pound has been static so far this morning.

There are no significant announcements taking place in the UK or Eurozone today and after some good strength over the weekend, the pound has fallen back to around Friday's close.

Dollar remains strong over sterling

The dollar weakened against the pound on Friday following an announcement by the House of Representatives to pass the £548 billion stimulus plan. The pound was supported by expectations that the G7 statement may outline plans to bolster the UK currency following its recent weakness. However the Group of Seven finance chiefs did not refer to the weakening pound, as investors speculate that this omission may ultimately weaken sterling further.

There are no significant announcements taking place in the US or UK today but with continued poor sentiment, the pound has weakend further.

US dollar continues to perform well over euro

The euro strengthened over the US dollar by 0.02 cents on Friday but closed the week 1.05 cents down at the 1.2862 level. Investor's attentions had been focused toward comment from the G7 meeting of finance ministers in Rome, however a draft statement released late in the US session made no reference to specific currencies other than the Chinese yaun. Eurozone GDP figures released earlier in the day showed that the eurozone economy contracted by 1.5% in the fourth quarter of 2008 and 1.2% in the year. In the US the Reuters/Michigan Consumer Sentiment index fell.

In today's trading the dollar has strengthened over the euro reaching as low as 1.2729, as worries about the health of European banks has promoted risk aversion and lead investors to buy the greenback for it's relative safety. There are no major announcements due out in either the US or eurozone today..

Aussie dollar falls against pound

The Australian dollar retracted against sterling in overseas sessions as rising risk aversion kept the dollar under pressure. High yielding currencies were affected as finance ministers from the Group of Seven countries offered nothing new on currencies at a meeting over the weekend in Italy. The pound was limited in its gains by sharp falls in the UK banking stocks after Lloyds Banking Group unveiled a hefty loss in relation to its HBOS subsidiary. However with good strength over the weekend, the pound is up this morning from Friday's close against the Aussie dollar.

Mixed performance for Kiwi dollar against pound

The New Zealand dollar has regained its losses against the pound after Friday’s weak retail sales data. The December quarter fall was the fifth consecutive quarter in a row, pointing to ongoing consumer weakness despite personal tax cuts and falling petrol prices. However gains posted over the weekend have started to be eroded as the pound gathers some strength.