The euro returned to its well-trodden downward path yesterday but equity, commodity and credit markets rallied from early lows as investors continued to weigh up the implications of emergency measures aimed at stabilising the eurozone announced on Monday.

Monday's market euphoria initially buckled under the weight of doubts over whether the rescue plan represented anything more than a short-term solution, with the mood of uncertainty helping to drive gold to a five-month high. “Although the aid package will be able to lower the financing costs for periphery countries, this will be at cost to the euro,” Carsten Fritsch at Commerzbank said.

“Especially, the European Central Bank's policy of buying government bonds from countries with fiscal problems is being viewed by many market players as a break of taboos.”