Daily currency report

The US dollar managed to rally from a series of multi-week lows against the other major currencies. The sterling came under heavy selling pressure following poor retail sales figures. Sales slumped by 3.9 per cent in June, bringing a three-month growth to its slowest since the end of 2007.

Sterling (GBP)

The sterling recovered from a two-week low against the US dollar as UK gross domestic product came in at 0.2 per cent in the second quarter, matching economists' forecasts. Nevertheless, the pound is again under pressure as a property survey revealed that the average price of a residential property in England and Wales dropped by 4.4 per cent since last year.

US Dollar (USD)

The US dollar bid up on the exchanges following better than expected durable goods orders and hawkish comments from Charles Plosser, head of the Philadelphia Federal Reserve, who stated that the Fed could be forced to start raising interest rates in order to stave off inflation. Also supporting the greenback was the decline in the price of crude oil and comments from the US Treasury Secretary, Hank Paulson, who again spoke in favour of a strong dollar.

Euro (EUR)

The euro traded near record highs against the US dollar before weakening drastically as the dollar rallied. The monthly finance report pointed to a slowing German economy. The data called into question the possibility of future rate hikes in the eurozone. Investors will be looking to see whether the last quarter point hike has had the desired effect.

Japanese Yen (JPY)

It was yet again carry trades that dictated the yen's value, with investors looking to make money from yield differentials. In terms of data, only retail sales numbers are likely to offer any significant insight into the health of Japan's economy.