Daily currency report

The yen was the biggest mover posting a three-month high against the dollar and a six-week high against the sterling before finally giving back its gains later in the day. Meanwhile, the euro gained against both the sterling and the dollar.

GBP
There was little change in the pound despite stronger housing market and mortgage approvals data. The lack of reaction in the currency may be due to the fact that the rise in approvals was related to the planned introduction of home information packs on August 1.

USD
The dollar lost ground after its strong performance last week as turmoil hit global asset markets. The dollar benefited from risk aversion rise as US investors cut back bets on foreign equities, emerging market currencies and commodities; however it gave back some gains as calm returned to the equities markets.

EUR
The euro rebounded despite weaker economic data emerging from France. The news was still not enough to convince analysts that monetary tightening has come to an end. Indeed, many analysts believe that the euro may rise for a second day against the dollar on the back of low unemployment numbers, providing further support to the ECB's case for higher rates.

JPY
The yen hit a three-month high against the dollar and six-week peaks against the euro and sterling despite a heavy defeat for Japan's ruling Liberal Democratic party in upper house elections. There were signs that profit-taking was nearing completion and that the direction of the yen would increasingly be determined by Japanese investors, who have been consistent sellers of the currency due to low domestic interest rates.

Commercial Foreign Exchange Travelex Malta, freephone: 800 77 33 22, www.travelex.com/mt/