The dollar remained near its highest level in a year against a basket of currencies as investors continue to view the US economy as likely to be the first to emerge from the current global slowdown. In contrast, economies such as the eurozone, the UK, and Japan are seen as vulnerable to further significant moderation.

Sterling (GBP)

The sterling fell after data showed another steep drop in manufacturing activity in July, the fifth consecutive month of declining factory output. The news highlighted the severity of Britain's economic slowdown and supported the notion that the UK's economy is likely to slip into recession before the end of this year. The data also supported the outlook for lower borrowing rates over the coming months from the Bank of England.

US Dollar (USD)

The dollar remained near the higher end of its recent ranges against most major currencies. The greenback continues to attract support as the outlook for the rest of the world deteriorates.

Euro (EUR)

The euro continued to take a pounding as figures released in Germany showed exports of goods were 1.7 per cent lower in July than in June. Exports have traditionally been a bright spot for Germany's economy but a weak US economy is hurting demand for luxury cars and other German goods. Europe is believed to be at risk of its first recession since the single currency was introduced in 1999.

Japanese Yen (JPY)

The Japanese yen firmed across the board as lower global equities weighted on investors' appetite for riskier assets often funded by borrowing in yen and then investing elsewhere. However, the yen's strengthening has not helped to lift the gloom surrounding the world's second largest economy.