Daily currency report
Overview
Trading was relatively subdued and currencies traded within narrow bands. Sterling still appeared to be under pressure, ending the session lower against the US dollar. There was also better news from the Euro-zone, where policymakers finally came up with a "safety-net" style package for Greece in the event further aid and support were required. Elsewhere, the US dollar was again well supported across the exchanges. Ben Bernanke's testimony before the Financial Services Committee failed to deliver any major surprises although Bernanke did still emphasise the need for an accommodative monetary policy.
Sterling
Sterling briefly hit a one month high against the euro as stronger than expected retail sales data for February showed that there is still life in the British Consumer. However, sterling's gains proved to be short-lived as release also included a sharp downwards revision to January's number.
US Dollar
Support for the US dollar continued to build across the exchanges, sending the greenback to a new 10 month high against the single currency, but also pushing it up against the pound.
Euro
Even as EU leaders finally agreed a eurozone rescue mechanism for Greece, the single currency fell to a new 10-month low against the US dollar although the euro has stabilised against sterling. The deal makes provisions to give Athens financial support in the form of bilateral loans from eurozone partners and the IMF in the event of "very serious difficulties". Under the terms of the agreement, the IMF would provide just over 30 per cent of such funding, with member states providing the rest. Policymakers are optimistic that such a package will make it easier for Greece to raise money on its own given the extent of the guarantees offered by the other member states.
Japanese Yen
The spectre of deflation looks set to keep the yen relatively weak in the short-term as data showed that core consumer prices fell 1.2 per cent in February from a year earlier. The data has fuelled speculation that the Bank of Japan may need to take additional steps to ease monetary policy once again.
Commercial Foreign Exchange Travelex Malta, freephone: 800 733 22, www.travelex.com/mt/