The euro is steady against the pound this morning and reached an Asian session high against the dollar. Sterling steadied against US currency but fell sharply versus the yen as weak US confidence data and lower equities encouraged investors away from currencies considered to be higher risk.

Pound Sterling - UK markets

Lower appetite for risk kept sterling trading below the 1.64 level against the dollar, well under levels close to USD1.67 reached last week, and pushed it to a one-week low against the yen falling 1% to 149.35.
Sentiment was dented further by falling equities, with UK shares falling more than 1%, while oil prices were also lower.

The UK's attention is already turning toward the Bank of England's Monetary Policy Committee meeting next week and whether its quantitative easing programme will be expanded.

US Dollar - US Markets

Weak US data and volatilities in the equity market paved the way for a flight to the dollar this morning. The GBP/USD rate stayed at 1.64 this morning and the greenback is testing 91.10 against the yen.

The federal currency is continuing its climb against major currencies due to fears that an economic recovery will take longer than previously expected. This is pulling investors away from the higher yielding currencies and boosting the dollar in the markets.

Euro - European Markets

The euro was steady against UK currency this morning at 90.34 pence and attempted to pick up from 1.47 low against the dollar on Tuesday, capping at 1.48 on early European session.

Last weeks bullishness is fading gradually as European markets continue to experience losses following weak sessions in both US and Asia following the unexpected deterioration of US consumer's confidence.

Other Currencies - Highlights

Asian shares fell this morning after the dip in US consumer confidence revived concerns about the pace of economic upturn.

The Australian dollar eased as inflation data made investors reduce their bets on a strong rate rise. The Aussie rose to as high as USD0.920 immediately after the inflation data but then retreated to USD0.909.

Despite dropping to levels below USD0.750, the New Zealand Dollar could gain this week on observations the pair is holding well on the upside.