Daily currency report

The US dollar rose to a five-and-a-half month high against an array of currencies and also managed a seven-week peak versus the euro, bolstered by a surprise rise in June home sales and diminished expectations for eurozone interest rate increases. Elsewhere, european Central Bank President, Jean-Claude Trichet, in remarks after the bank rates decision, said he expects economic growth in the eurozone to weaken substantially this year, even though inflation is expected to remain above the bank's target.

Sterling (GBP)
The sterling lost yet more ground against the US dollar as the Bank of England left rates unchanged. Analysts now believe that borrowing costs are expected to remain on hold for a while as policymakers balance slowing growth and rising inflation.

US Dollar (USD)
The US dollar rally continued following a surprise 5.3 per cent rise in June's pending home sales. Analysts have argued that this rise in pending home sales could be a consequence of banks pushing down prices of repossessed properties in a bid to boost sales.

Euro (EUR)
The euro weakened against the pound and the dollar following the release of the European Central Bank's rate decision. The bank left rates unchanged, but it was Trichet's comments, which as usual, proved to be more market-moving.

Japanese Yen (JPY)
Japan's key machinery orders for June, a key gauge of capital spending, fell by seven per cent less than forecasted by analysts. Despite that, the yen remained within sight of the week's seven-month low versus the greenback.

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