The dollar rally continued as better than expected data and a further decline in the price of crude oil gave investors the opportunity to support the greenback. Elsewhere, sterling lost ground against the dollar following weak retail sales data and more bad news from the mortgage market.

Sterling (GBP)

Sterling fell against the dollar and the euro after data highlighted the accelerating pace of slowdown in the UK. The negative outlook for the UK's economy has been exacerbated by the fact that monetary officials have been unable to respond to the slowdown in growth with much-needed policy easing due to soaring inflationary pressures. Consequently, the pound is likely to remain under selling pressure in the short-term.

US Dollar (USD)

The US dollar held close to 1 month high against the other major currencies. Consumer confidence rose, representing the first increase in confidence since December, strengthening the dollar. The outlook remains remaining pretty dreary but the better than expected data along with a sharp drop in oil prices has helped the dollar firm to a series of multi week highs.

Euro (EUR)

The euro came under pressure again following data that showed French consumer confidence tumbled to a record trough of -48 this month. The strong euro, soaring food and energy prices, a slowing global economy and rising interest rates have weighed on nearly all key gauges of confidence and suggest steadily slowing growth ahead.

Japanese Yen (JPY)

The decline in Japan's June industrial production is due mostly to output fall in cars and chip-making equipment and weakness in overseas demand. It still seems though, that the Japanese economy is headed for a soft landing suggesting that the Bank of Japan can afford to hold interest rates steady until concerns over domestic activity and the global economy eases.