The dollar fell yesterday despite a hike in interest rates as analysts believe economic reports today will show a cooling of the economy, signaling and end to the run of recent rate rises.

This morning the dollar stood at 1.2713 to the euro and at 1.8316 to the pound.

Yesterday the US Federal Reserve raised interest rates by a quarter of a percentage point to 5.25 per cent.

The move was the 17th hike in a row and took interest rates to their highest level in more than five years.

However, the dollar fell as a survey on personal consumption, due to be published at 08:30 EST, is expected to show spending just rose 0.4 per cent in May, the smallest increase in three months, Bloomberg reports.

It is therefore predicted that this interest rate rise signals the last in a cycle of upward moves.

"There is a sense that another rate hike by the Fed will not be automatic," David Jones, head of consultancy at DMJ Advisors, told the BBC.

This was echoed by Stephen Koukoulas, chief Asia-Pacific strategist at TD Securities, speaking to Bloomberg: "We're seeing a clear sign that the Fed is very close to pausing on its tightening cycle."