Focus will be on the Fed this week, with the FOMC interest rate announcement, expecting to leave rates on hold at 5.25 per cent for the ninth consecutive meeting. However, markets will pay close attention to the tone of the accompanying statement.

GBP
The sterling rose slightly against the dollar as US data showed non-farm payrolls rose in July at the slowest pace since February. Although the pound performed well against the dollar, it faired less well against other currencies, as the soft US jobs data led to sell-offs in global equity markets as investors pulled out of risky assets.

USD
The dollar briefly retreated after weaker than expected US employment and business activity data overshadowed the turbulence of credit markets and focused minds back on the economy. Although it is expected that the Fed will keep interest rates on hold in this week's policy meeting, some feel that easing inflationary pressures could give the Central Bank room to make a rate cut if the disappointing data continues.

EUR
In the eurozone, Thursday's ECB bulletin should contain further details on the outlook for monetary policy. At last week's press briefing, ECB President, Jean-Claude Trichet hinted that rates would be increased in September, stating that the Central Bank will be strongly vigilant in regard to the upside risks to price stability.

JPY
As the BoJ's August policy meeting approaches, markets will be looking to this week's round of data for any clues as to the timing of an interest rate rise.

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