A comparatively inhibited period of activity on the currency markets saw the dollar dip slightly overnight before recovering, while the pound was bolstered by new economic data.

News that the Gulf Coast was again bracing itself for the impact of another tropical storm - this time named Rita - bumped up oil prices, resulting in gains by the euro on the dollar.

By this morning fears voiced by the National Hurricane Centre that the storm could escalate into a full-on hurricane had been assuaged as oil process fell back.

This morning the dollar stood at 1.2151 to the euro and 1.8023 to the pound.

A report from the Royal Institution of Chartered Surveyors showing that the British housing market was on an upward curve, with early signs that the interest rate cut was having some impact, buoyed the pound.

Further evidence for movement in the property market is expected to emerge from the Monetary Policy Committee (MPC) minutes issued tomorrow, while further comment from MPC member Stephen Nickell due later today will also shape sterling's week.