Forex - Sterling and Euro dropped sharply against Dollar and Yen. - Forex Forum

The Dollar hit an eight-month high against a basket of major currencies early Today, getting a boost from a sharp drop in Oil prices on expectations that Hurricane Gustav's damage to US energy facilities may be less than feared.

Latest comment by Britain's finance minister that economic challenges are the greatest in 60 years sparked a sell-off in Sterling, driving it to a two-year low against the Dollar and a all-time low against the Euro. The Yen climbed broadly as the slide in Sterling and Euro have prompted market players to unwind carry trades, in which the low-yielding Yen is used to fund purchases of higher-yielding currencies.

RBA cut its benchmark interest rate by 25bp to 7% on Tuesday, as widely expected. It was the first easing in seven years for the Australian Central Bank.

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