The euro and sterling were on Tuesday trying to recover from multi-year lows against the dollar hit the day before, as policy makers tried to get a grip on the energy crisis, though the rate sensitive Japanese yen slipped to a new 24 year-low.
The pound and euro both gained over 0.6% with the pound reaching as high as $1.19609, and the euro $0.9987 up from its 20-year low hit on Monday.
"That governments are working on price caps, support for the consumer and really trying to get a grip on the energy crisis helps set a floor on those two pairs," said Samy Chaar, chief economist Lombard Odier
"Also, on the other side we have better news for the euro and cable from looking at the U.S. dollar. Maybe there is a bit less inflation pressure in the U.S. and so maybe we are at the start of the beginning of the Fed adjusting its strategy to stay at a restrictive level rather than hiking ever more."
Britain's incoming Prime Minister Liz Truss is considering a freeze on household energy bills to try to avert a winter cost-of-living crisis for millions of households, Reuters reported on Monday.
EU ministers will meet on Sept. 9 to discuss urgent bloc-wide measures to respond to a surge in gas and power prices that is hammering Europe's industry and hiking household bills, after Russia curbed gas deliveries to the bloc.
Russia has halted gas flow along the Nord Stream 1 pipeline to Germany indefinitely, at first blaming an oil leak at a compressor station but since linking the stoppage to sanctions imposed by the west.
Gazprom's (GAZP.MM) deputy chief executive Vitaly Markelov told Reuters on Tuesday that the pipeline will not resume shipments until Siemens Energy (ENR1n.DE) repairs faulty equipment.
Elsewhere, the yen continued to tumble, with the dollar gaining 0.7% on the Japanese currency to 141.56 yen a new 24-year peak.
Moves in other crosses were even more stark. The euro climbed a stonking 1.2% to 141.2 yen and sterling gained 1.4% to 163.92 yen.
