Daily currency report

The sterling slipped against the euro and a basket of currencies as falling UK house prices and record-low consumer confidence continued to underline economic weakness. Despite its broader losses, the pound held steady versus the dollar, which ran into selling pressure due to week US economic growth figures. The euro struggled against the dollar after the European Union Statistics office reported an acceleration in the eurozone's inflation rate.

Sterling (GBP)
The British pound found little support as it appears that economic weakness is seen holding the Bank of England back from raising interest rates to tackle inflation.

US Dollar (USD)
The dollar fluctuated in a narrow range after data showed a surprise jump in US weekly jobless claims and growth expanded below expectations in the second quarter, rekindling concerns about the economy. Analysts said the claims data, coupled with the revision of fourth-quarter economic growth estimates were enough to revive the debate on whether the world's largest economy was in or closer to a recession, a factor which would diminish the chances of raising interest rates later this year.

Euro (EUR)
The euro remained on the back foot following data that showed that both inflation and unemployment are rising. Inflation is at 4.1 per cent, more than double the European Central Bank's target of two per cent. Looking further ahead, the outlook for interest rates is less clear, as evidence continues to mount that the eurozone economy is likely to face the dilemma of slowing growth against rising inflation.

Japanese Yen (JPY)
The yen rose to a two-week high against the euro and advanced the most versus the Australian and New Zealand dollars, as faltering global growth and a slump in Asian stocks prompted traders to pare holdings of higher-yielding assets funded in the Japanese currency.

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