Sterling hit a one-and-the-half-year high against the euro and notched up a six-week high against the dollar, as the pound found continued support from renewed optimism that the UK is on the road to financial recovery. This is in steep contrast to the deep debt concern in the eurozone, where record costs to insure Greek government bonds against default are dragging the euro back down. The US dollar regained some of its footing after initially falling in reaction to the Fed's statement, which struck a subdued tone on the outlook for growth in the world's largest economy. Still, the dollar steadied on the back of the release of the durable goods orders for May, which was slightly better than investors had expected.

Sterling
The pound continued to be one of this week's top performing currencies, as it soared to fresh highs against the dollar and the euro. In the absence of any first tier economic announcements from the UK, sterling continued to advance on the back of speculation that the Chancellor of the Exchequer George Osborne's Budget will help Britain safeguard its top credit rating without sacrificing growth.

US dollar
The dollar benefited along with the yen from the demand for the safest currencies as signs the global economic recovery is slowing. Markets appeared jittery after the Federal Reserve said that financial conditions have become "less supportive" of growth. However, risk sentiment picked up as a report from the Labour department showed the number of Americans applying for initial unemployment benefits declined by 19,0000 to 457,000.

Euro
The euro fell broadly, hitting an 18-month low against the pound, while nearing a record low against the Swiss franc. Renewed worries about the bloc's sovereign debt crisis weighed heavily on the single currency as the cost of insuring against a Greek debt default rose to a record high.

Japanese yen
The yen is near a one-month high versus the dollar on quarter flows. Many investors who had gone short of the yen earlier this month on speculation that Japan's new Prime Minister Naoto Kan will support a weaker yen are now unwinding those positions.

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