Daily Currency Report

The dollar continues to be under pressure, more due to the strength of the pound and the euro than anything happening in the US. Meanwhile, the yen is also struggling as investors continue to use it as the currency of choice to fund carry trades.

GBP
The pound is the currency of choice, climbing to its highest against the yen since 1992, a move which also triggered highs against the dollar not seen since the sterling left the ERM in September 1992. The move was supported by increasing market expectation that more rate hikes in the UK were on their way, with traders pricing in a 55 per cent chance of a move in February and a 100 per cent chance of an increase in March.

USD
It was another bad day for the dollar, which fell against the euro and hit a 14-year low against the sterling.

EUR
The euro remained strong, hitting another all-time high against the yen and rising against the struggling dollar. It fell slightly against the sterling, falling to a four-year low, a loss which was later reversed after the release of robust eurozone industrial orders for November.

JPY
The market's appetite for carry trades showed no signs of slowing down yesterday as the yen fell against nearly everything. It hit a fresh all-time low against the euro and a 14-year trough against the sterling.