Chris Redfern Moneycorp

For five consecutive weeks the yen has been at or close to the rear of the pack.

It took the wooden spoon again last week after the prime minister cancelled a sales tax increase and called an early general election. Surprise was not the issue; it is just that investors are becoming ever more convinced that the only direction for the yen is south east.

The antipodean dollars might have been down there with the yen had it not been for an unexpected interest rate cut by the People's Bank of China at the end of the week. The reduction in its benchmark rate from 6 per cent to 5.6 per cent was seen as a positive for the Chinese economy and therefore also for the exports of Australia and New Zealand.

The euro fared no better than the Aussie. It took a bath on Friday morning when the European Central Bank said in a speech: 'We will do what we must to raise inflation and inflation expectations as fast as possible.'

The implication was that German resistance to out-and-out quantitative easing is being eroded by its struggling domestic economy.

Sterling perked up a little when the Monetary Policy Committee minutes showed two of the nine members still voting for a rate increase despite the bank's warning about a long period of below-target inflation. Investors were sufficiently surprised to reduce short-sterling positions.

Stronger-than-expected UK retail sales helped too, as did an improvement in manufacturers' order books. But an uptick in inflation from 1.2 per cent to 1.3 per cent made little difference because it had been well flagged by forecasters.

The numbers to watch this week are the revisions to third-quarter economic growth in Germany, the US, Canada and Britain and the provisional eurozone inflation reading. US consumer confidence on Tuesday will also be worth a glance.