The pound fell back, despite better than expected unemployment data, after the new Chancellor of the Exchequer, George Osborne, announced that he would be giving greater powers to the Bank of England while closing the Financial Services Authority in its current form. The pound lost ground on the negative knee jerk reaction to any perceived form of increased financial sector regulation. A pullback in risk appetite saw the US dollar make ground as the eurozone faced fresh concerns over its sovereign debt crisis.

Sterling

Sterling eased back from one-month highs against the dollar as investors pulled back from riskier assets. However, the decline was limited as better the expected employment figures were released. In his first Mansion House speech, UK Chancellor George Osborne stated that he would hand over more powers to Bank of England to police the financial sector. Sterling lost ground on fears of increased finance and banking sector regulation.

US dollar

Economic data released in the US was very mixed and markets reacted benignly to data that suggested US inflation was little cause for concern. The dollar ultimately saw an improvement on the back of a pullback in risk appetite and fears over banking regulation reform in the UK.

Euro

The euro fell against a basket of currencies as ongoing concerns regarding the Europe's debt crisis continued. In particular, fears for Spain's credit and banking system undermined sentiment after rumours surfaced that the indebted nation was appealing to the EU, US and IMF for a credit line.

Japanese yen

The Japanese yen rose for the second consecutive day against the euro over concerns Europe's debt crisis will impair the economic recovery of the 16-nation region. This boosted demand for the yen as a safe haven currency.

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