Figures released yesterday show US GDP grew by 2.9 per cent, although growth is behind levels reported earlier this year.

The dollar this morning was worth €0.77895, £0.52495 and 117.32500.

The US department of commerce data show GDP rose at an annual rate of 2.9 per cent in the second quarter of 2006.

Commerce secretary Carlos M Gutierrez claimed the growth - 0.4 per cent higher than expected - showed how the Bush administration had "allowed the US to remain the fastest growing economy in the industrialised world over the past 12 months even with high energy prices".

However, the markets were less enthusiastic about the data as GDP growth is still below the rate of 3.5 per cent recorded in January.

In the UK, sterling was aided by new figures from the CBI that showed retail sales in August were above expectations - with 45 per cent of retailers reporting sales being up.

The good results may lead the Bank of England to consider a further interest rate rise this year - although the full affect of this month's rate increase may not have filtered through to the high street.

In Europe, the European Central Bank today will announce its interest rate decision and the euro has already made gains on speculation that the cost of borrowing could be hiked.