Daily currency report

Sterling and the euro were both up and down against the US dollar as risk appetite ebbed and flowed. Cautiously optimistic comments from the Federal Reserve and unexpected signs of economic growth in Europe were tempered by disappointing US retail sales figures, falling employment figures, slowing wage growth and limited access to credit. The single currency hit one-week highs against the US dollar and was up against sterling following the positive economic news on this side of the Atlantic.

Sterling
Sterling made limited gains against the dollar as risk taking sentiment resumed after the US Federal Reserve indicated it saw recession nearing an end and moved to phase out one emergency measure.

US Dollar
The US dollar fell against a basket of currencies including the euro and sterling. The greenback also fell against the yen after the US labour department said initial jobless claims rose more than expected last week. An unexpected decline in US retail sales for July also weighed on the dollar.

Euro
The euro reached a one-week high against the dollar and was up against the pound. The eurozone's two biggest economies posted surprise returns to growth in the second quarter, which helped drag the US dollar lower against a resurgent euro despite the US Federal Reserve's statement that the financial crisis is pretty much over.

Japanese Yen
The Japanese yen rose broadly, rebounding from earlier losses versus higher-yielding currencies after Chinese shares dropped and prompted investors to reverse their investments in riskier assets. The US dollar dipped against the yen, pulling away from eight-week highs hit last week, hurt by the disappointing US retail sales data and as the yen rose due to a fall in Chinese shares by around 2.4 per cent.

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