Daily currency report

The sterling rose against a broadly weak euro, pulling away from record lows as investors locked in profits on the single currency's dramatic climb this month. However, the sterling fell against the dollar, and hit a record low on a trade-weighted basis as UK economic woes and lower interest rate expectations kept the currency under selling pressure. The markets will see thinner than usual liquidity to the start of this week as many traders look to start their Christmas holidays early.

Sterling
The pound ended Friday slightly up against the euro as sentiment towards the pound received a boost from a better-than-expected GFK consumer confidence survey on the UK. However, analysts played down the data by saying there is still a lot of weakness in the UK economy and until we get much better news on that front, the pound will continue to come under downward pressure.

US Dollar
The dollar rebounded off a two-and-a-half-month low against the euro, however, against the yen it remained within striking distance of a 13-year low despite a rate cut by the Japanese central bank.

Euro
European Central Bank Governing Council member and Head of Bank of Spain Miguel Angel Fernandez Ordonez claimed the bank might cut interest rates next month if inflation expectations were significantly less than two per cent.

Japanese Yen
The Japanese yen initially fell after the Bank of Japan, as widely expected, slashed its key interest rate to 0.1 per cent to help ease its slumping economy. Previous to the rate cut the yen rose for a seventh week versus the dollar, touching a 13-year high as Japan's government signalled it might intervene in the foreign-exchange market for the first time in four years to limit the currency's rally.

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