The U. S. Dollar and the Japanese Yen jumped at the expense of currencies which are yielding higher returns as declining falling shares impacted risk demand. Meanwhile, the Euro was under selling pressure because of dismal data which highlighted worries about a poor state of the economies in the Euro Zone.
The Pound Sterling bounced to a 3-week high against the U.S. Dollar and the Euro following a key interest rate cut by the Bank of England by 50 basis point to 1.5%, in an attempt to shore up the U.K. economy from sliding deeper into recession.
By 12:45 GMT, the U.S. Dollar .DXY changed slightly against a basket of currencies and traded at 82.073. The strength of the Japanese Yen pushed the Euro lower by 1.4% to 124.44 Japanese Yen, while the U.S. Dollar fell by 1.3% to 91.38 Japanese Yen. The Australian dollar also fell by 1% and traded at $0.7033. The Euro fell by 0.1% against the U.S. Dollar and traded at $1.3613, after a fall to a low of $1.353 this session.
According to data from Reuters, oil prices fell by about 12% as a result of concerns about the global economy, thus pushing the U.S. Dollar higher against higher-yielding currencies.