Sterling hit one-week lows against the dollar and euro this morning, as the pound fell to political uncertainty as Prime Minister Gordon Brown fought off an attempt within his party to unseat him.

Pound Sterling – UK Markets

The pound cowered around the USD1.591 level this morning after a former British cabinet minister who called for a secret ballot on Brown's future admitted that his surprise move had failed. As well as weakening the Labour leader the move has also damaged UK currency, which currently trades at 1.111 versus the euro.

US Dollar – US Markets

The dollar weakened against most major currencies owing to the ADP Employment Change coming out worse than expected. However, the pounds weakness has kept levels at 0.626 and the euro trades against the greenback at 0.695 as traders await US Unemployment claims.

Euro – European Markets

The euro declined in Asian trade, slipping -0.4% against the US Dollar and remains around the 1.436 level. The single currency managed to make gains against the pound due to the political worries in the UK and currently trades at 0.899 versus the pound.

Other Currencies – Highlights

The Australian dollar has touched 1.731 against the pound, the strongest in 25 years, and traded up 0.5% at 1.733 as retail sales climbed 1.4% from October. Earlier the yen dropped to 92.69 per dollar after Japanese Finance Minister Naoto Kan said on his first day in office that he backs a weaker currency.