The yen rose to the highest level in five months against the euro and rallied versus the dollar as a decline in stocks prompted traders to pare holdings of higher- yielding assets funded in the Japanese currency.
The pound fell to a record low against the euro after Chancellor of the Exchequer Alistair Darling said the British economy faces the worst slump in 60 years.
The Bank of England will keep interest rates unchanged at 5% on Sept. 4, according to a survey of economists.
The euro fell against the dollar on speculation European Central Bank policy makers will acknowledge this week that the euro-zone economy is weakening, making an rate increase less likely. The ECB will leave its benchmark rate at 4.25% on Sept. 4, according to a survey. Business confidence in Germany, Europe's largest economy, slumped last week, adding to concern the euro-zone will fall into a recession.
EUR/USD slowly eased down from $1.4720 to $1.4580 after the release of weak Germany retail sales figures.
GBP/USD also declined and tested 2-years lows. Ratefellfrom$1.8130 to$1.7980.
USD/JPYfellfromY108.70 toY107.60 beforereboundedtoY108.40.
EU PPI report is due to come at 09:00 GMT today and may weight on euro’s move ahead of ECB rate decision.
Later focus will be on ISM manuf. Index at 14:00 GMT with analysts predict index fell to 50.0 in
August after 50.2 month earlier.