Europe, the Americas and Asia all face some combination of rising inflation and stagnating growth as record-high oil prices and the effects of a year-old financial crisis have wrought havoc on the global economy.

Sterling (GBP)

The pound eased against the dollar and euro, failing to find any gains even after the Bank of England held interest rates for the third consecutive month at 5 per cent. Inflation is now a major problem, coming in at 4 per cent for June, which was double the UK's target. British house prices fell 2 per cent on the month, which was double the economists' forecasts and 6 per cent down from last year.

US dollar (USD)

The dollar gained as the price of crude oil remained nearly $10 a barrel below record highs and rebounding equities encouraged renewed buying of the greenback. Ben Bernanke and Henry Paulson called for new regulatory powers to shield the economy should a Wall Street firm collapse and told Congress it needed to modernise the regulatory system so it could deal with modern banking crises.

Euro (EUR)

The euro held firm despite dismal industrial production figures. Declining factory activity across the 15-member bloc was highlighted with the drop of the Purchasing Managers Index into contraction territory for the first time in three years. These results have left question marks over the need to increase interest rates by 25 basis points by the European Central Bank.

Japanese yen (JPY)

The yen traded in tight ranges even though a government survey showed that consumers are feeling the soaring costs of energy and food. The Japanese Central Bank is more concerned about the economic downside risks than accelerating inflation. As a result, the financial markets expect the Bank of Japan to keep interest rates on hold for months to come.