Daily currency report

The pound was range-bound versus the dollar but ticked up during trading as the US were on a bank holiday for Labour Day.

GBP
After strong UK manufacturing data, the pound is on a strong footing versus the dollar and strengthened against the euro. This comes before the BoE's interest rate announcement, where rates are expected to be kept at their current level of 5.75 per cent and is a sign that recent rising UK interest rates are not stifling industry, as might have been expected.

USD
The dollar held steady against the majors as the market awaited a plethora of US economic data this week for clues as to whether the credit turmoil of the past month has dented US economic growth.

EUR
The euro begins the day slightly down against the pound following strong UK manufacturing data and the weak manufacturing business in the eurozone as a result of a declining order book growth. Further affecting matters in the eurozone was the news that French manufacturing activity slowed for a third straight month in August, mainly as a result of lacklustre exports.

JPY
There wasn't much movement in the yen against the other majors as trading was thinner than normal due to Labour Day in the US. A sharp fall in capital spending will likely reverse Japan's economic growth in the Q2 of 2007 adding to expectations that the BoJ will refrain from increasing the low Japanese interest rate, putting the yen under further pressure against the pound.

Commercial Foreign Exchange Travelex Malta, freephone: 800 733 22, www.travelex.com/mt/