The sterling rose to a one-month high against the dollar and speculation continued over Fed's interest rate cuts next week.

GBP
The sterling touched upon a one-month high against the dollar primarily due to the fact that the dollar is weighed down by interest rate cut expectations. The sterling is certainly reaping the rewards of inherent dollar weakness, although soft British producer prices released and an ongoing tightening across UK money markets fit the view that interest rates have peaked. Furthermore, with data coming in on the weaker side and markets scaling back rate expectations, the sterling is likely to come under pressure in the foreseeable future.

USD
The dollar slid to a 15-year-low against a basket of currencies after data revealed the fact that employers cut jobs for the first time in four years, ultimately fuelling speculation that the Fed will cut interest rates by 0.5 per cent. The jobs numbers and the sub-prime mortgage market issues have raised concerns over the impact of US growth and the dollar has suffered as a result.

EUR
In Europe liquidity injections from the ECB, in recent weeks, have helped to bring down overnight euro rates to as low as 2.93 per cent more than a full percentage point below the bank's benchmark rate of four per cent.

JPY
The release of Japan's July core private-sector machinery orders came in at an unexpectedly strong 17 m/m. This eased jitters over capital spending outlook and is somewhat positive for the Japanese economy, also confirming that there is no change to the upward trend in capital expenditure growth, however, will do little to affect the BoJ's monetary policy, which is focusing on the downside risks to the economy.

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