Daily Currency Report

Overview

The sterling jumped to a two-year high against currencies of major trading partners and a 15-month peak against the euro. In stark contrast, it was a day of woe for the dollar, taking its largest daily fall in nearly a month against a basket of key currencies.

GBP

The British pound rose to its highest level since June 2005 against the euro and a two-week high against the dollar on the back of this week's data showing a record rise in mortgage lending. Possibility of a November rate hike also helped push the sterling further.

USD

The dollar's losses were extended after data showed mid-Atlantic area manufacturing fell sharply in September, bolstering the view that the Federal Reserve will leave interest rates on hold.

EUR

European Central Bank council member Axe l Weber claimed that countries running current account surpluses would benefit from more flexible exchange rates.

JPY

Next week sees the Japanese Prime Minister Junichiro Koizumi handing the baton over to Shinzo Abe, and this is expected to be a positive move for the markets. Mr Abe has promised to continue with the structural reforms while promoting economic growth.

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

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