Daily Currecy Report

Overview

BOE left interest rates on hold at 4.5 per cent while the European Central Bank announced a 0.25 per cent increase to 2.75 per cent. The dollar was the winner of the session for the fourth consecutive day with the news that the al-Qaeda leader in Iraq had been killed and the US central bank still hinting of a rate increase at the end of June.

GBP
Weak economic figures, no change on UK interest rates and the stronger dollar pushed the pound lower.

USD
The greenback finished up 1.3 per cent against the euro, 0.6 per cent against GBP and 0.6 per cent against the yen. The strong dollar rally was a combination of factors. The news that Abu Musab al-Zarqawi had been killed also gave the USD a lift.

EUR
As widely expected the ECB raised interest rates to a three-year high. ECB president Jean-Claude Trichet indicated that the ECB are ready to move rates again whenever necessary.

JPY
The yen lost ground against the dollar yesterday but remained stronger against other major currencies, there was little economic data released to initiate these moves but the slide in the equity markets and comments from the Japanese government officials did.

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