The Bank of England as the European Central Bank, left interest rates unchanged and its quantitative easing measures on hold for this month, leaving sterling largely unchanged. Sterling stepped back off of two-month highs seen against the US dollar, and highs against the euro, despite the better-than-expected release of industrial output figures. The dollar was left at two-week lows against the euro, following a spate of negative US data, raising concerns about the strength of economic recovery over the second half of the year.

Sterling
Sterling eased, touching a two-month high against the US dollar. Although cable was largely driven by US dollar weakness, industrial output figures were released above expectations, 0.7 per cent month on month, proving a positive improvement on last month's -7 per cent reading. All focus was then pinned on the Bank of England's rate decision, where, to no surprise, the policy remains unchanged along with the quantitative easing measures.

US dollar
The US dollar finished mixed, closing at a fresh two-month low against the euro but near a one-week peak against the yen. Higher world stocks and improved investor sentiment drove market players away from lower yielding currencies like the greenback and yen.

Euro
Following the European Central Bank's decision to leave interest rates at a record low of one per cent, European Central Bank President Jean-Claude Trichet said that he expects economic growth in the 16-nation area to continue at "a moderate and still uneven pace, in an environment of high uncertainty". The eurozone central bank president also welcomed the upcoming release of bank stress tests, which officials hope will help to restore confidence in the bloc's financial sector.

Japanese yen
The yen fell to a two-week low against the euro as Asian stocks rose on signs the global economy will weather Europe's debt crisis, damping demand for the relative safety of Japan's currency.

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