The pound fell against both the dollar and the euro, with the revelation of the Royal Bank of Scotland reporting a loss of £24.1 billion for 2008 - the biggest ever loss in British corporate history. Ultimately £235 billion in assets have been placed under a state insurance scheme. Meanwhile, the US dollar gained across the board as a result of safe-haven buying.

Sterling

Sterling erased all recent gains, slipping from its highest level this year against the yen and plummeting against both the euro and the dollar. The Bank of England is likely to cut rates next month. Furthermore, house prices fell 1.8 per cent in February as confidence in the UK market has failed to rise.

US Dollar

US house prices fell at an annualised rate of 15 per cent last month compared with January last year. Barack Obama appealed to Fannie Mae and Freddie Mac to be less cautious in their approach to lending. It appears that Obama harbours the belief that the Americans should spend their way out of recession.

Euro

The single currency managed to claw back much of the losses suffered against the pound as it benefited from detrimental data in the UK, rather than any positive news in the eurozone. According to Reuters, Germany's unemployment rate is seen rising to 7.9 per cent from 7.8 per cent in January, as unemployment is seen increasing by 60,000.

Japanese Yen

The Bank of Japan policy board member Noda stated that they need to watch the degree of currency volatility, irrespective of whether the yen is strengthening or weakening. The Nikkei rose by 1.3 per cent overnight as Nissan motor announced news that it plans about smaller output cuts, erasing qualms about a slumping demand.