The Federal Reserve left the cost of borrowing at two per cent, which initially gave the greenback a boost on the exchanges. Eventually the dollar gave up these gains as investors tried to interpret the Federal Reserve accompanying statement. Elsewhere, the Norwegian central bank surprised the market by increasing rates to 5.25 per cent, which led to a rally in the Norwegian krone.

Sterling (GBP)
The sterling remained steady as sales data came in better than expected even if it pointed to a third consecutive monthly fall in sales. Analysts still feel the longer term outlook for the UK economy as well as for the sterling remain gloomy.

US Dollar (USD)
As had been widely anticipated by financial markets, the Federal Reserve kept rates on hold, bringing to an end the sharpest rate-cutting cycle in over a decade. Significantly, it would also appear that the Fed has switched its position on monetary policy away from concern over the economic downturn to one of caution regarding the threat of inflation.

Euro (EUR)
The euro hit session highs versus the dollar, boosted by comments from Jean-Claude Trichet, who was still signalling a possible 25 basis point increase when the European Central Bank next meets on July 3, taking the rate to 4.25 per cent. Inflation in the 15-nation euro area accelerated and the credit crunch is starting to affect the eurozone.

Japanese Yen (JPY)
The yen held steady against the dollar as solid demand from Japanese importers, who missed opportunities to purchase the dollar at previous highs, helped push the yen higher. Broadly speaking, however, the yen has been hurt though by expectations that the Bank of Japan will keep interest rates at a low 0.5 per cent to compensate a weak domestic economy. This was reflected in the yen's decline against other higher-yielding currencies, hitting fresh lows against the euro and Swiss franc.

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