Daily currency report

The sterling fell to near a one-month low against the dollar and weekend versus the euro, after the Bank of England announced it was uncertain about the path to take to get British inflation back on track, following higher than expected inflation data. Elsewhere, the dollar fell against the euro after US housing starts plunged to their lowest level in more than 17 years in May, reducing the chance of an early Federal Reserve interest rate increase.

Sterling (GBP)

The pound fell against a basket of currencies, extending losses after the Bank of England claimed it was unsure which direction it would take to get UK inflation back under control, denting speculation for an interest rate rise this year.

US Dollar (USD)

The dollar dropped against the euro for a second day, as declines in housing and industrial production and a rise in producer prices, raised speculation that the Federal Reserve will delay increasing borrowing costs this year.

Euro (EUR)

The euro pared gains against the dollar after a report showed investor confidence in Germany fell this month to the lowest in more than 15 months. However, the eurozone unexpectedly swung to a trade surplus in April from a deficit in March as imports and exports expanded despite signs of a weakening economy. The data, though normally volatile, may offer some reassurance that the eurozone's economic slowdown will be milder than many analysts had feared despite a string of weak business sentiment surveys, a strong euro and a credit crunch.

Japanese Yen (JPY)

The yen continued to weaken after the release of the minutes from the bank's May policy committee meeting. Some policy board members claimed rises in commodity prices were causing both demand and supply shocks to Japan's economy.