Sterling enjoyed a good session on Monday, ending the day up against all the other major currencies. The Bank of Japan's governing council opted to keep interest rates on hold at 0.5 per cent.
GBP
Sterling rose against the euro and dollar on Monday, supported from firm British housing data, which showed house prices continued to firm. The data suggests the housing market remains buoyant despite three interest rate hikes since August, potentially boosting the case for further monetary tightening from 5.25 per cent. Also up for release is Chancellor Gordon Brown's budget in which he will unveil the government's spending and fiscal plans for the next 12 months.
USD
The USD gained on the Euro, Yen and Canadian dollar but dropped against the British pound ahead of Wednesday's FOMC policy meeting. Nonetheless, the dollar was reasonably well supported and was able to shrug off a disappointing NAHB housing market index.
EUR
The Euro lost on the day, although ECB Council member Klaus Liebsher reiterated that the ECB will do "everything necessary to keep inflationary pressures" in check. Elsewhere, the euro was forced slightly lower as French Interior Minister, Nicholas Sarkozy, targeting ECB Vice President claimed that the bank's single focus on inflationary pressures has crimped overall growth and disproportionately increased the euro's strength in the markets.
JPY
The Bank of Japan opted to keep interest rates on hold at 0.5 per cent in a move that had been widely anticipated by market analysts. Across the exchanges there has been little reaction to the news as few people expected any change in policy following the Bank of Japan's rate hike last month.