The US federal reserve opted yesterday (August 8th) to keep interest rates at 5.25 per cent after 17 consecutive rate rises, however there were hints at further increases.

With the decision not unexpected the dollar stood at €0.77865 and £0.52435.

A statement from the rate-setting federal open market committee (FOMC) explained that rates were held due to "moderated" economic growth, cooling housing market and "the lagged effects of increases in interest rates and energy prices".

The FOMC also stated that although inflation was likely to calm, risks still exist

The body said: "The committee judges that some inflation risks remain.

"The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth."

In the UK, the Bank of England's quarterly inflation report is published today. A Bloomberg survey of economists predicts the report will show inflation is set to rise further but slow next year.

Last week's interest rate rise will go some way to hold down inflation, although a further rise has not been ruled out by some analysts - which would continue to hold sterling up.