The pound out-performed the other major currencies, ending higher across the board. The catalyst for the sterling's success was the Bank of England's decision to cut rates to one per cent; the lowest level in history. The announcement helped reassure financial markets that UK policy makers are ready to do everything in their power to restore order to markets. This contrasted sharply with the European Central Bank, who opted to keep rates on hold at two per cent in spite of overwhelming evidence of a dramatic slowdown in the eurozone. This procrastination spooked investors who sold off the single currency across the board.

Sterling
The Bank of England cut interest rates by another 50 basis points and this was seen as a positive move by the markets. It also represented the fifth consecutive interest rate cut since October, as the Bank feels stimulation is required to encourage consumers and companies to spend again and help the British economy out of recession.

US Dollar
The dollar is trading higher against the euro, but at this week's low against the sterling. Safe haven buying of dollars increased, boosting the greenback against the Japanese yen and the single currency, after weekly jobless claims figures rose to 26-year highs touching 626,000. Versus the pound, however, the dollar fared less well as the sterling drew support from the Bank of England's welcome rate cut.

Euro
The euro came under pressure as the European Central Bank kept interest rates unchanged at two per cent. The bank did, however, leave open the option of cutting rates at its next meeting in March.

Japanese Yen
The yen took a battering against the US dollar, trading at a four-week low. Talk of options expiries and a positive close in equity markets has allowed the yen to trade at lower levels as investors look to take on more risk.

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