The pound rose to a session high earlier this morning whilst the euro managed to stabilise after taking a steep drop yesterday. Meanwhile the dollar eased as short covering receded and higher-yielders rebound after a fall on profit taking.

Pound Sterling - UK markets

Sterling advanced on Asian session earlier today after bouncing at USD1.628 session low, recovering the ground lost during US trade to reach a 1.638 high.

The pound seems to be gathering momentum versus the federal currency to reverse to the downside as the pair is struggling to breach the resistance of 1.640 successfully. At the moment GBP/USD has recorded a high of 1.639 and a low of 1.628.

US Dollar - US Markets

The dollar eased against a basket of currencies this morning, trimming some of yesterday's sudden gains as investor selling of stretched higher-yielding currencies and the euro paused.

The dollar hit its highest in a month against the yen, touching 92.33 yen before falling 0.1% to 92.12 yen.
Analysts expect the US economy to expand 3.3%in the third quarter, anything lower than this, such as the shock GDP numbers from Britain late last week, could trigger another wave of selling in riskier assets.

Euro - European Markets

The euro took its steepest fall since early August on Monday, dropping nearly 1% as the dollar index posted its best daily gain since September as investors unwound short dollar positions after a sudden fall in stocks and commodities.

The EUR/USD currently trades at 1.486 while recording a high of 1.492 and a low of 1.484, the momentum indicators show a downwards trend on the one-hour charts.

Other Currencies - Highlights

Canada's dollar depreciated to the lowest level in almost three weeks as the head of the nation's central bank reiterated concern the currency has grown too strong and crude oil and stocks tumbled.

The Australian dollar rose from Monday's low of USD0.912 on good support from buyers around that level and was holding at 0.918, below last week's 14-month high of 0.933. The Aussie is likely to be supported by guesswork on whether rates will move up by 25 or 50 basis points next month, after Australia's central raised rates earlier this month.

The yen was at 136.74 per euro this morning and has risen against the dollar on speculation Japanese companies are bringing back earnings on overseas assets before the end of the month.