Daily currency report

The pound begins the week on a strong footing versus the dollar following the recent recovery of the dollar over the last two weeks.

GBP
The sterling begins the week up against the dollar from where it's been over the last weeks. One factor for this is because the fundamental reasons behind the pound's recent strength against the dollar have not actually changed and so the credit issues in the market have been somewhat pushed further back in people's minds. The BoE interest rate announcement takes place on Thursday although any rate hike is expected to occur later in the year rather than this week.

USD
The dollar starts the week on a poor footing against the majors as investors look ahead to see if US economic data will show the turmoil in credit markets has taken a toll on growth. The Fed reassured investors that it would take any steps needed to shelter the US economy from a global credit squeeze.

EUR
The euro is slightly down against the pound but up versus the dollar as the market looks towards Thursday's interest rate announcement from the ECB. Eurozone inflation was stable for August and economic sentiment weakened which points to a no-change in the interest rate.

JPY
The pound has re-strengthened versus the yen since last week as the market remembered why the pound was in such a strong position in the first place. Manufacturing activity in Japan picked up slightly in August while jobless rate hit a new nine-year low, keeping alive suggestions that the BoJ will raise interest rates.

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