Daily currency report

Sterling rose further to hit a new six-month high against the US dollar as analysts have pointed to both rising confidence in the UK economic prospects and worries about the US recovery as catalysts for the pound’s rise. The greenback traded on weaker footing against all the major currencies, sliding against the Japanese yen and losing ground against both the euro and the British pound.

Sterling

Sterling enjoyed another healthy day’s trading. It pushed to fresh six month highs against the US dollar and reached to five week highs versus the euro. The pound shrugged off a weaker than expected construction PMI reading as sentiment remains positive towards the pound.

US dollar

Continuing poor data from the US kept the dollar under more selling pressure. Although poor personal income and spending figures had largely been pre-empted in last week’s GDP figures, the downbeat readings were enough to weaken the US dollar further.

Euro

The lack of economic data, apart from producer prices for June left markets fairly unchanged. PPI was largely in line with expectations but did little to change market expectations that the European Central Bank will keep interest rates on hold. With inflation currently in check and the prospect of further austerity measures in debt hit European countries, the ECB may be forced into keeping monetary policy loose for sometime.

Japanese yen

The Japanese yen is currently trading at eight month highs against the US dollar, but is rapidly approaching 15 year highs that the cross had been close to last year.

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