The pound received a boost as British Retail Sales rebounded in January after the worst December in three years. In addition UK inflation rose in January, driven by rises in food and petrol prices. Last month the Consumer Price Index rose up from 2.1 to 2.2 per cent, the highest rate since June 2007, potentially limiting the MPC's scope to cut interest rates further.

GBP
The sterling rallied against the dollar as British retail sales rebounded in January, underlining the fact that while consumer spending may be slowing it is certainly not about to collapse. The Bank of England inflation report due out is crucial in painting a picture of future decisions.

USD
The dollar fell against the euro but rallied against the yen after the news that billionaire Warren Buffet had offered to assume trouble bond insurers' liabilities. In fact, Mr Buffet claimed that the Berkshire Hathaway plan would cover $800 billion in municipal bonds. The upshot of this was a lift against the yen as the yen is considered a safety net for traders for risk aversion.

EUR
The euro lost some ground, as the question lingers as to whether slower European growth should warrant a European Central Bank interest cut in the coming months, in spite of concerns over inflationary pressures. Furthermore, European Central Bank officials have suggested that they were hesitant to take the cue from the Federal Reserve's aggressive rate cuts.

JPY
With the release of Japan's gross domestic product data for the fourth quarter, Economists expect Japan's economy to have expanded by 0.4 per cent in the fourth quarter which would ultimately translate to an annualized growth of 1.6 per cent.

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