The pound strengthened across the board, however, with the Bank of England set to make an interest rate announcement on Thursday, these gains were ultimately capped as investors remain convinced that an interest rate cut is imminent. Elsewhere, the Reserve Bank of Australia increased interest to seven per cent.

GBP
The pound ended up against both the euro and the dollar, managing to garner support from a return to carry trades, as investors sold the yen to fund purchases of higher yielding currencies. As a consequence of having the highest interest rates of the G7 industrialised nations, the sterling tends to benefit most from these carry trade positions.

USD
The dollar remains on the back foot across the exchanges, with traders finding little reason to offer the currency any degree of lasting support. As evidence continues to mount that the world's largest economy is rapidly cooling, there appears to be a growing feeling that the Federal Reserve will almost certainly be forced to cut interest rates yet again when it meets in March.

EUR
In spite of losing ground against the dollar and the sterling, the euro remains reasonably well supported across the exchanges. The European Central Bank, set to make an interest rate announcement, is largely expected to leave policy unchanged even though core inflation is running at 3.2 per cent.

JPY
The yen weakened as gains in Asian equity markets sparked investors' appetite for risk and led to a resumption of carry trade positions in which the yen was sold-off in order to fund purchase of higher yielding currencies.

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