Daily Currency report

In the only significant data release, UK PPI figures exceeded expectations with input prices shown to have increased by 1.8 per cent and output prices increasing by 0.4 per cent. Retail sales figures will be released in the US, and in Europe the market will be waiting for the latest GDP figures for the euro.

GBP

The release of the UK producer price index saw positive inflation data. The disappointing house price survey, as well as a flat leading indicators report, stripped the pound of any possible gains. With sterling left largely unchanged, market focus will now be on the Bank of England's latest growth and inflation forecasts.

USD

The dollar did actually touch a six-week high against the euro, although it proved to be very short-lived. With a firm report and an expectedly upbeat assessment by Bernanke, we expect to see the dollar regain its broadly short-term confident tone.

EUR

The German economy was shown to have frozen during the last quarter of 2005 as preliminary data showed that GDP was unchanged from Q3. Economists remain confident that the German figures will not derail expectations for an ECB rate hike, widely tipped to happen next month.

JPY

The yen posted further gains against the US dollar yesterday following further comments from the Bank of Japan Governor, Toshihiko Fukui. Also driving the Yen upwards was a larger-than-expected current account surplus and solid industrial production figures.

Compiled by Commercial Foreign Exchange Travelex Malta. (Free phone: 800 77 33 22) www.travelex.com.mt