Last week saw the dollar slump to new lows as the Fed cut interest rates by 25bp to 4.50 per cent after its policy meeting. In contrast the pound rallied, as BoE's chief economist, Charles Bean, became the fourth policy maker to suggest interest rates will remain on hold.

GBP
No data was released in the UK although the pound still managed to hit another 26-year high against the dollar for the fourth consecutive day, as the credit crunch continues to bite. This week's focus will be on Thursday's BoE policy announcement, highly expected to keep interest rates on hold.

USD
The dollar hit a record low against six currencies as investors feel the Fed may need to cut interest rates again. However, outside the US housing sector, recent data in the US has reflected the economy is more resilient than many initially thought, backed up by good US jobs data which beat forecasts with US employers creating twice as many new jobs than expected.

EUR
A robust euro reached record highs against the dollar last week but ended the week slightly down versus the pound. According to ECB governing council member, Yves Mersch, the strong euro reflects the eurozone's solid growth outlook and balanced trade position.

JPY
The yen was steady against the dollar recovering from a brief dip as sliding stock markets kept investors on edge about the credit market troubles. However, it lost ground to a basket of currencies after the BoJ left interest rates unchanged at 0.50 per cent and lowered its forecast for both growth and inflation in its semi-annual economic outlook.

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