Daily Currency Report
The US dollar lost ground for a second consecutive session as portfolio inflows into the US disappointed. The sterling hit a three-week high against the Euro and the dollar.
The sterling hit a one-week high against the dollar and a three-week high against the euro after strong economic UK data heightened chances of an interest rate rise this year. Soaring sales of replica England football kits, and new HD televisions have helped push the headline annual growth of retail sales volumes to its highest level since January 2005.
The US dollar was again sold-off against the other major currencies as data released showed that the US attracted just $46.7 billion in foreign capital in April, far short of what was needed to cover the $63.4 billion trade deficit.
The European Central Bank (ECB) sounded a fresh inflation warning, forecasting that price growth could overshoot its two per cent annual target. The forecast published in its monthly bulletin, has fuelled speculation that the ECB will again raise interest rate this year.
Following on from the Bank of Japan policy meeting, where interest rates were held at zero, the head of the BoJ, Fukui, expressed his concern that Japan's consumer prices would likely remain in a positive trend and the output gap shows aggregate demand is gradually rising above supply, supporting prices.
Compiled by Commercial Foreign Exchange Travelex Malta. (Free phone: 800 77 33 22) www.travelex.com.mt