The leading event in the forex market today has been the sudden dip in the value of the pound and as today's unexpectedly dismal industrial and manufacturing reports from the UK added further weight onto the struggling currency.

Pound Sterling – UK Markets

Sterling slid to one-week lows against the dollar and euro today after data showing an unexpected fall in British manufacturing gave the pound another clout as it still remains dazed from political and economic uncertainty. Data showing British manufacturing output declining 0.9% in January, the sharpest monthly rate since last August pushed the pound to fall over 40 pips against the euro, and 50 pips against the dollar in today's mid-day trading. At 1428 GMT it traded at 1.4956 versus the dollar and 1.0978 against the euro. Fears about a hung parliament were flagged by political opinion polls yesterday and concerns about Britain's sovereign ratings after a ratings agency highlighted the country's worsening credit profile.

US Dollar – US Markets

The dollar strengthened against a damage pound today and at 1437 traded at GBP0.6710 and EUR0.7347. Credit downgrade warnings by rating agencies regarding some European countries such as Greece, Portugal and the UK continued to worry investors and as a result they’ve been opting for the greenback. However, US currency did decline against the Australian dollar and the Canadian dollar in earlier trading.

Euro – European Markets

The euro fell to the lowest level against the Australian dollar since 1997 after Fitch Ratings said yesterday that Greece’s prospects in the next six to nine months are less certain than over the short term. The single currency traded at 0.9109 against the pound at 1433 GMT. European currency had been starting to regain some ground after IMF chief Dominic Strauss-Kahn said "there's no reason" to expect that Spain and Portugal would need external support. The markets are yet to be convinced of that let alone the ability of the Greeks to be able to sort out their debt problems. The ambiguity by the EU with regards to a bail-out for Greece will have to go one way or another and this will make for major developments for the single currency.

Other Currencies – Highlights

The Japanese yen has experienced losses as a recent Bank of Japan report indicated a potential monetary easing policy, to be enacted later next month. Should such a policy be undertaken, the impact will likely result in an intentional weakening of the Japanese currency, as speculation of this move already has.