Following last week's soft quarterly inflation report, investors will be trying to read between the lines as they attempt to assess the future direction of interest rates in the UK. The dollar remained on the back foot after the White House lowered its growth.

GBP
The sterling strengthened against the dollar and the euro, supported by data that showed British Industrial orders were not as weak as analysts had feared. This added to speculation that the BoE will raise interest rates again next year.

USD
The dollar fell against majors as dealers closed their long dollar positions ahead of public holidays in Japan and the US. The dollar is being sold by Japanese exporters on wariness about its slowing economy and the erosion of the currency's interest rate advantage.

EUR
Despite interest rate rises over the past year, eurozone inflation is not showing any signs of easing. The ECB, however, expects the annual rate to rise and has predicted that it is likely to remain over two per cent for the coming year.

JPY
The yen hovered close to its record low against the euro as traders were being encouraged to sell the Japanese currency. The recent stability of the yen has encouraged investors to use it to invest in higher fielding assets due to the low interest rates in Japan.