The pound fell against the euro but gained against the dollar. Investors in most currencies are likely to remain cautious before adopting new positions ahead of the Federal Reserve's interest rate announcement due out which is widely expected to be left unchanged at two per cent

Sterling (GBP)
The sterling rose against the dollar although this more a consequence of dollar weakness rather than any genuine support for the pound. The moves came in spite of disappointing mortgage data from the British Bankers Association that showed approvals slumped to a record low in May. The sterling did lose ground against the single currency in the wake of this data, but losses were limited as weakness in the housing market has already been priced in.

US Dollar (USD)
The dollar slipped against all the major currencies as consumer confidence dropped and housing prices plunged to a 16-year-low. A surging euro also sapped US confidence further and pushed expectations of future prosperity to an all time low.

Euro (EUR)
German consumer sentiment fell to 3.9 as a result of inflation fears. French business sentiment and consumer spending numbers surprised to the upside, while Italian consumer confidence dropped. Investors will be focused today on eurozone industrial orders, and German Consumer price index. Positive data will fuel expectations of a rate hike next week to 4.25 per cent.

Japanese Yen (JPY)
The yen strengthened against the dollar and euro as traders geared themselves against more dismal economic data from Asia. At the moment the Bank of Japan is focusing mostly on the effect on the yen from global economic slowdown.

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