The dollar fell against the euro after comments made by the Federal Bank suggested it would continue to inch interest rates up to stave off inflation.

Amid a backdrop of potential momentum building up in inflation in the US as a result of the hurricane season impact on energy prices, the dollar fell slightly.

The dollar stood at 1.1957 to the euro and 1.7639 to the pound this morning.

Philadelphia Federal Reserve president Anthony Santomero said there was no timetable for rate rises and freezes, but said that they would "continue shifting monetary policy from its current somewhat accommodative stance to a more neutral one".

Elsewhere movement in the euro may follow further talks today between the two parties contesting Germany's inconclusive election, as the Christian Democrats and the Social Democrats seek to thrash out an agreement for a coalition government.

Investors are hopeful that a decision can be reached soon, brining clarity to plans for proposed economic reform in Europe's largest economy.

Elsewhere the UK awaits further information on the interest rate, which will be announced tomorrow after today's Monetary Policy committee meeting.