Sterling gained against a weaker US dollar but gains were capped and it slipped against the euro on soft UK data. Figures from the Halifax showed that house prices increased by only 0.1% last month and an unexpected drop in retail sales undermined the fragility of the UK economy. With the Bank of England’s monthly interest rate meeting on Thursday, this poor data only goes to support no change in monetary policy for another month as the MPC tries to avoid stifling UK growth despite rampant inflation. It is a quiet day for data today in the UK, so call in now for a live exchange rate.

In the euro zone, the euro hit a one-month high of $1.4682 against the US dollar, helped by more favourable German factory data, but also by a general US dollar sell-off. The euro also gained after a senior government official stated that the Greek government expects parliament to meet one of the conditions for receiving new international funding – namely voting through austerity measures to rein in spending. Against sterling, many investors are bracing for an interest rate hike in the euro zone in July which saw the euro gain. Out today, there is European GDP and German production data, so ensure you take advantage of any movements.

The US dollar hit a record low against the Swiss franc and fell against other currencies on Tuesday after a senior Chinese foreign exchange regulator warned about the risks of investing too heavily in dollar-denominated assets. The US dollar has fallen by nearly 11% against the Swiss franc this year. In addition, US monetary policy is expected to remain unchanged for some time - a view that was enhanced last week after data showed the U.S. economy added far fewer jobs than expected in May.

Elsewhere, the Australian dollar was flat after the Reserve Bank of Australia kept interest rates on hold and gave no hints of tightening in the immediate future. The NZ dollar however climbed nearly 1% against the US dollar to as investors bought ahead of a central bank rate decision on Thursday. The South African rand was the best performer against the US dollar, rising 1.1%, after reports showed the central bank’s foreign currency and gold reserves fell. The rand has gained 16% against the dollar in the past year.

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