Daily currency report
Sterling
Sterling edged higher against the dollar, helped by a bout of short covering, after the pound fell to a one-month low the previous day. The pound pared gains against the dollar after data showed new US single-family home sales fell in July to set their slowest pace on record, giving the dollar some safe-haven support against sterling and other perceived riskier currencies. Sterling edged up against the euro, cutting earlier losses, as a boost to the single currency following an above-forecast German sentiment survey was soon dampened by concerns about the outlook for peripheral euro zone countries.
US dollar
In yet another disappointing release in the US, new US single-family home sales slumped to the slowest pace on record in July. Besides, orders for costly durable goods missed their forecast by a wide margin, increasing by only 0.3 per cent versus expectations of a three per cent rise; heightening fears the economy is at risk of a new downturn. The dollar strengthened against the euro, and even managed to come off 15-year lows against the yen after Japan’s finance minister toughened his rhetoric to state he would take “proper measures” to curb the currency’s rise if necessary.
Euro
Early in the session the single currency rallied across the board after the German IFO index hit a three-year high, pushing the pound up along with it. German business confidence showed an unexpected rise in August to its highest level since June 2007.
Japanese yen
The yen pulled back from 15-year highs against the dollar and a nine-year peak versus the euro on speculation Japanese authorities may take steps such as yen selling intervention to stem the currency’s rise.
Commercial Foreign Exchange Travelex Malta, freephone: 800 733 22, www.travelex.com/mt/