Sterling / Euro

The pound remained range-bound in choppy trading yesterday, to finish the day marginally down against the euro at 1.1057.

• With little economic data released yesterday, sterling took its direction from speculation about Alistair Darling's pre-budget report, due tomorrow.
• Investors are hesitant to take up sterling positions ahead of the report, which is expected to include a one-off windfall tax levied against UK banks and a new higher-tax rate for high earners.
• Halifax House Prices, UK Industrial Production and Manufacturing Production figures are all due from the UK this morning, although these releases are likely to be side-lined somewhat as investors await Alistair Darling's report..

Sterling / US Dollar

After posting strong gains against sterling on Friday, the US dollar gained almost a cent yesterday to finish at $1.6395.

• The US dollar continued to rise on the back of better-than-expected employment figures from Friday.
• Also contributing to the dollar's rise is a further fall in some Dubai stocks, as worries persist about Dubai World's ability to restructure its debt.
• US Fed Chairman Ben Bernanke reiterated ultra-low interest rates would persist for an extended period, however this did not dampen demand for the US dollar.

Euro / US Dollar

After suffering significant losses against the US dollar on Friday, the euro remained under pressure against the greenback yesterday, although it finished the day only marginally down at 1.4823.

• The US dollar posted strong gains against the single currency on Friday, following better-than-expected non-farm payrolls data from the US.
• The employment figures revealed that the US unemployment rate has unexpectedly improved to 10% from 10.2%.
• The euro failed to recover its losses yesterday, falling to a 1-month low against the dollar before recovering to finish only marginally down on the day.
• Industrial Production figures are due from Germany this morning, while in the US ABC Consumer Confidence figures will be released this evening.

Rest of the World

Australian Dollar

The pound remained range-bound against the Australian dollar yesterday, falling by around half a cent to finish at 1.7957.

• Sterling is slightly lower against the AUD this morning, with Australian Business confidence rising to its highest level in more than 7 years.
• Australian Current Account Deficit measured at AUD16.2 Billion for the September quarter, less than predictions of AUD16.7 Billion.
• The market is now looking to the Australian Unemployment Rate, due out on Thursday.

New Zealand Dollar

The pound traded within a narrow range against the New Zealand dollar yesterday, finishing very slightly up at 2.3013.

• Sterling is trading at similar levels to that of yesterday, with the market holding positions before the RBNZ Interest Rate decision tomorrow.
• The forecast is for rates to remain on hold, however market analysts will look to the Monetary Policy Statement and Press Conference for timing of future rate increases.