Daily currency report

Fears over a double-dip recession caused sterling to slip once again. Minor recoveries made during the week were wiped out after Andrew Sentance, a member of the Monetary Policy Committee, outlined his fears over the possibility of a double-dip recession in the UK. Sterling fell by over 1.5 and 1 per cent against the greenback and the euro respectively. On a day of few data releases, the US dollar also managed to maintain its strength against the euro. The ongoing division of opinion between EU nations regarding the best solution for Greece's bail-out allowed the greenback to strengthen by 1.7 per cent against the single currency.

Sterling

Sterling experienced significant falls following concerns over the possibility of the UK entering a double-dip recession. The Bank of England member suggested that there is "some risk of a double-dip". Political uncertainty also loomed large as opinion polls highlighted the real possibility of a hung parliament following the elections in a few weeks time.

US dollar

The greenback enjoyed further strength as strong economic data is expected this week which could indicate that the Federal Reserve may be closer to tightening interest rates sooner than its global rivals. Its gains of 1.5 and 1.7 per cent over sterling and the euro respectively were also aided by safe haven flows following further UK political uncertainty and doubts over the source of financial assistance for Greece.

Euro

Appetite for the euro took a hit as EU nations continued to debate over the source of financial assistance for Greece. The single currency slid by 1.7 and 1.8 per cent against the dollar and the yen respectively. Economists are predicting a similar pattern this week ahead of an EU summit meeting where Greece will be the main focus.

Japanese yen

The Japanese yen strengthened across the board, in particular against sterling and the euro, as safe havens flows increased as a result of the uncertainty surrounding Greece.