GBP

Sterling remained supported throughout the week with no firm moves or unexpected data as the Bank of England left rates and quantitative easing (QE) on hold. GBP/USD was steady, trading close to levels not seen since August 2008. The pound lost roughly half a pence on the euro however, as the single currency enjoyed a boost later in the week. Sterling also continued its slide against the Australian dollar with GBP/AUD losing almost four cents last week. Looking ahead, it’s a relatively sparse week for data, though Tuesday’s manufacturing figures and inflation report hearings will be in focus.

EUR

The euro stiffened last week, rising to its highest in two years against the dollar as the European Central Bank (ECB) left rates on hold and unveiled no additional measures to kickstart growth or spur in inflation. EUR/USD was near its strongest since October 2011, briefly breaking through the 1.39 level at one stage. The euro was up almost two per cent against the yen, meanwhile, with EUR/JPY strongly supported. EUR/GBP also gained as the hawkish comments from the ECB and its president, Mario Draghi, sent the single currency broadly higher. In the week ahead investors will be (among other things) watching for events in Ukraine with a view to any potential impact on the euro. Draghi played down the possible effects, but with the situation constantly evolving the potential for a move in the euro exists.

USD

Last week was all about Friday’s stronger-than-expected non-farm payrolls data, which showed the US economy added 175,000 jobs last month (while the unemployment rate ticked up slightly). The news sent investors piling into the dollar as the data was seen as strongly supportive of the Federal Reserve’s tapering policy. USD/JPY kicked up sharply, rising almost two per cent for the week. EUR/USD was knocked back slightly by the data, but it was not enough to reverse the dollar’s losses to the single currency for the week (with the greenback losing around a cent). Plenty of data out this week should give investors food for thought as they digest the non-farm payroll report. Look for Thursday’s unemployment claims figures and retail sales data. Friday’s University of Michigan consumer sentiment index will also be one to watch.

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