The sterling yet again came under pressure in spite of the Bank of England's decision to leave interest rates unchanged at five per cent. Instead, investors focused more on the European Central Bank, who also left rates on hold, but revealed that a rate hike had been debated. The news was enough to propel the single currency versus the pound and the dollar.

Sterling (GBP)

On a widely anticipated move, the Bank of England's monetary policy committee left rates on hold, a decision that comes in spite of growing evidence that the manufacturing, construction and services sectors are all struggling. Instead, the bank has clearly decided to focus on inflation, which is currently running close to three per cent, and likely to go higher over the coming months. More bad news from the property market put the pound under pressure across the exchanges, suffering heavy losses against the euro.

US Dollar (USD)

The dollar held steady against the sterling but lost ground versus the euro as mixed data failed to inspire traders to back the greenback further.

Euro (EUR)

The single currency gained heavily, as the European Central Bank held the cost of borrowing at four per cent, but indicated that a further tightening of policy is imminent, possibly next month, as with inflation currently stuck at 3.6 per cent and rising, it would seem that the bank will be obliged to act sooner rather than later. By the time markets closed, the euro gained over a cent versus the pound and also reversed much of week's earlier losses against the US dollar.

Japanese Yen (JPY)

The yen again fell back against the dollar following better than expected retail sales data in the US. The news prompted some investors to sell the yen in return for higher yielding assets as they rebuilt their former carry trade positions.