Daily Currency Report

Overview

The pound fell sharply against the dollar and euro. CPI Data released sparked speculation that the Bank of England may cut interest rates. The US urged China to let the yuan float freely. The US trade deficit with China is wider than with any other country, and a stronger yuan may narrow the gap by making Chinese exports more expensive.

GBP

A rise in consumer prices accounted for the slip in sterling against the dollar. This may re-ignite speculation that UK rate-setters could cut interest rates. However, some analysts said that British inflation could pick up in the coming months, as oil prices continue to hit record highs.

USD

The dollar snapped a five-day slide against the euro after a technical indicator suggested the decline was excessive. The US currency gained further support against the euro, as a report showed stronger manufacturing in the Philadelphia area.

EUR

European government bonds gained as concern of rising energy costs undermined confidence and could jeopardize growth in the economies using the euro. A report showed that consumer optimism in Italy fell to its lowest as oil traded near a record high.

JPY

Yen remained range-bound against the dollar and euro, but strengthened slightly against the weakening pound.

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

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