Market Overview

The dollar briefly rebounded against the euro and the sterling in a volatile trading session on Thursday, drawing support from losses in gold futures. However, the dollar did decline, mainly against the yen on speculation that the Federal Reserve's six interest-rate cuts since September won't be enough to stem credit-market losses and revive the economy.

GBP
The sterling dropped to session lows against the euro and the dollar, after HBOS Plc, Britain's biggest mortgage lender's shares plummeted by as much as 17.1 per cent in London and denied it had "liquidity problems". At the same time weaker-than-expected UK average earnings data was released which also fuelled market moves.

USD
The dollar's recovery against some of the major trading currencies was cut short by a light rebound in gold prices and renewed credit market concerns after news of further write-downs at Credit Suisse. Analysts suspected a combination of factors had driven the US dollar higher earlier, including the decline in commodities, the urge among investors to switch from riskier assets back into dollars ahead of the long Easter weekend and the need for the dollar to trim the heavy losses sustained this month.

EUR
The euro held steady despite cautionary comments by Belgium's Guy Quaden and Luxembourg's Yves Mersch, suggesting that the eurozone economy was not immune to the slowdown in the United States and would also be scarred by the financial market turmoil. Data released by Eurostat showed the euroZone's trade deficit widened considerably in January, as the euro strength seems to be an obstacle for European exporters.

JPY
The yen rose for a second consecutive day against the dollar and euro as declines in gold and oil fed speculation investors are exiting purchases of commodities that were financed with cheap loans from Japan.

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