The pound had a quiet day as UK markets were closed for the August bank holiday. Overnight, a GfK consumer confidence survey saw its first rise since February and gave sterling a boost. The US dollar rose as equity markets worldwide fell on concerns that the US recovery may be grinding to a halt. A better-than-expected personal spending figure did little to excite markets as traders bought into safe haven currencies including the US dollar and Japanese yen. The euro faltered as it was sold off as traders sought out safer assets.

Sterling

With UK markets closed for the summer bank holiday, there was little to report. Friday’s quarter 2 GDP figures for the UK had shown a revision upwards but this did little to help sterling as it was sold off before the public holiday. The pound received a boost overnight as a GfK survey saw consumer confidence improve in August.

US dollar

The US dollar benefited from its safe haven status posting gains against the pound, euro, Australian and Canadian dollars. Investor sentiment remains negative and falling Wall Street stocks saw traders take flight from riskier assets.

Euro

The euro was a loser during the session. A pullback in risk appetite and falling stock markets caused traders to pull out of riskier assets, hurting the single currency. Concerns about a faltering US economy and the consequences for the global economy kept the euro on the back foot as investors backed safe haven currencies such as the US dollar and Japanese yen. The euro had received some positive news as consumer, economic and services sentiments all beat expectations across the eurozone. However, the good news was largely overshadowed by risk aversion in markets.

Japanese yen

The Japanese yen strengthened yet again, flirting with 15-year highs against the US dollar again. The constant talk of Bank of Japan of government intervention in currency markets failed to materialise. As the US recovery derails, investors have shied away from higher risk currencies and assets, instead buying into safe haven currencies.

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

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