A sell off in shares sparked demand on refuges, led by franc and yen, amid the undergoing concerns that global economies may head to another recession.

STOXX 600 recorded the sharpest daily drop in 2 1/2 years, led by banking shares, while S&P 500 tumbled 4.5% yesterday amid the undergoing slowdown and fears that European banks will not be able to fund themselves.

Wall Street Journal said U.S. regulators are carefully monitoring local operations in Europe's largest banks on probable funding problems stemming from the spread of debt crisis.

The Swiss franc led the incline as it advanced against majors as the most favorable safe haven, especially in the wake of the escalating European debt crisis. The franc pared some of the drop witnessed this week after several monetary interventions from the SNB to curb the franc's runaway.

The euro remained under pressure Merkel-Sarkozy meeting failed to came out with agreement regarding expanding the European rescue fund or creating Eurobonds next year.

Concerning the EUR/CHF pair, it rose slightly on the daily basis to trade around 1.1338, where it recorded a high of 1.1391 a low of 1.1250.

Moreover, the yen showed advance against majors as investors resorted to the currency as a refuge despite ongoing talks from the Japanese Finance Minister that the BoJ may intervene strongly to curb the yen's appreciation.

The dollar, on the other hand, also benefited from haven demand where it advanced against a basket of major currencies to a high of 74.46 before it erases its advance to fall near the day's opening at 74.22, according to the dollar index.

Yesterday's data from the U.S. added to concerns as it referred to more sluggishness in the U.S. economy.

Concerning the USD/JPY pair, it continued the sideway moves seen over the past six sessions with slight downside tendency to trade at 76.47 after touching a high of 76.97 and a low of 76.29.

The trading range for today is among key support at 74.80 and key resistance now at 79.55.

Moving to the British pound, it recovered its earlier losses when it fell to a low of 1.6442 rebounding to 1.6522.

Data released today showed that public sector net borrowing excluding interventions showed that the deficit has narrowed to 0.0 billion pounds in July from the revised deficit of 14.3 billion pounds deficit.

So far, the pair has touched a high of 1.6537, whereas The trading range for today is among key support at 1.6225 and key resistance at 1.6745.