Daily currency report

The sterling lost ground to both the euro and the dollar as British inflation data came in below forecast, ultimately stoking speculation for an interest rate cut in the coming months. Elsewhere eurozone inflation data rose above the benchmarked 2 per cent for the first time in a year which enabled the currency to put further pressure on the sterling.

GBP
The sterling was again sold-off against the US dollar and euro after British inflation data came in lower than forecasts. Inflation remained steady at 1.8 per cent last month on the consumer prices index measure, defying City expectations that it would move up to 1.9 per cent.

USD
The greenback shrugged off more gloomy news over the housing sector to end the day up against the pound and steady versus the euro. US home-builder sentiment fell to a record low in October as borrowers faced difficulty in getting mortgages from stricter lenders.

EUR
The European Central Bank confirmed that consumer prices in the 13 countries rose 0.4 per cent month-on month for September to 2.0 per cent from 1.7 per cent in August. The reason for this can be attributed to a rise in both oil and food prices which took eurozone inflation above the European Central Bank's target for the first time in a year.

JPY
The Nikkei stock average fell this morning below the psychologically key 17,000 level for the first time in two weeks. This enabled the yen to gain as the drop in Japanese and Asian share prices made investors anxious of taking risks, ultimately putting pressure on the higher yielding currencies.

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