The single currency tumbled to 1.2763 on the back of a global economic slowdown together with the downgrade on Ireland’s long-term debt by Moody's Investor Service, prompting investors to buy the U.S. dollar as a safe-haven currency. The Standard & Poor's rating agency earlier this month cut the credit ratings of Spain, Portugal and Greece. U.S. gross domestic product contracted at a 3.8% annual rate from October through December, the biggest decline since 1982.

The British pound rallied from 1.4185 to 1.4545 on better-than-expected mortgage data which showed that lenders in the U.K. granted 31,000 loans for house purchases in December, compared with 27,000 in the previous month. The single currency fell sharply against the sterling from 0.9084 to 0.8804 and weakened versus the Japanese yen to 114.35. Dollar rebounded from intra-day low of 89.15 to 90.09 against the Japanese unit.

Swiss National Bank President Jean-Pierre Roth said he is ‘comfortable’ with the development of the franc and its moves have not been ‘brutal’. The Swiss franc declined briefly to 1.1660 versus the U.S. dollar after Finance Minister Hans-Rudolf Merz said that the government would support the central bank if it sold the currency to weaken it. SNB Vice Chairman Philipp Hildebrand said last week the bank stood ready to engage in unlimited currency intervention to weaken the franc and fend off deflation. Euro rebounded to 1.4996 against Swiss franc before falling again to close at 1.4860.

Next week will see the release of U.K. Halifax house prices, German, eurozone and U.K. manufacturing PMI respectively, U.S. personal income, construction spending and ISM manufacturing on Monday; German retail sales, U.K. PMI construction, eurozone PPI and U.S. pending home sales on Tuesday; U.K. Nationwide consumer confidence, German, eurozone and U.K. services PMI, eurozone retail sales, U.S. ADP employment and ISM non-manufacturing on Wednesday; German factory orders, U.S. jobless claims, productivity, revised durable goods and factory orders on Thursday; Japan’s leading indicators, U.K. industrial production, manufacturing production and PPI, German industrial production, U.S. non-farm payrolls and unemployment rate on Friday.