Sterling rose as the Bank of England kept interest rates on hold at 0.5 per cent and showed no immediate signs of extending its monetary policy. In the eurozone, the single currency pared gains against the dollar as the European Central Bank also left interest rates unchanged. However, it sounded a cautious tone on the economy, saying growth rates in coming quarters would be uneven. Across the pond the greenback tumbled broadly- hitting one-week lows against the euro, sterling and the Aussie and three-week lows versus the Canadian and Swiss currencies as positive global data and rallying stocks boosted risk sentiment.

Sterling
Sterling rose, supported by European equity market gains and as investors took the view that bad news for the pound was largely priced in. The Bank of England kept interest rates at a record low of 0.5 per cent as widely expected, ahead of the new government's June 22nd budget which should detail the extent of the fiscal tightening Britain faces.

US Dollar
The dollar came under heavy selling pressure after US stocks moved sharply. A flurry of international economic data gave traders comfort that a global recovery remains on track for now in spite of the fiscal problems in the eurozone and monetary tightening in Asia. The subsequent improvement in risk appetite saw the dollar fall.

Euro
The euro rose for a third straight day as strong demand for Spanish bonds eased concerns about the country's ability to finance its debt. A spike in Chinese exports boosted confidence on global growth and triggered a wave of risk appetite, helping to lift the euro.

Japanese Yen
The Japanese yen came under heavy selling pressure as equity markets jumped while a Spanish bond auction was received well in the Euro Zone. The Bank of Japan is set to detail a plan to stimulate credit for private companies that may prove sufficient enough to spur economic growth and defeat deflation.

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

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