It was another good week for the euro, and another bad one for sterling and the US dollar.
The euro did not have it all its own way though. A fortnight after it rebounded from $1.05 it has still been unable to climb beyond $1.10. Similarly with sterling, the €1.35 level seems to provide decent support. If the euro's downtrend has indeed been reversed, its recovery is proving hard to come by.
That is not to say the pound and the US dollar were putting up much of a fight. Both suffered on Tuesday from inflation figures which showed consumer prices unchanged in the year to February. It was by no means a surprise that inflation came in at zero, but the numbers were taken as a reminder that central banks can hardly start pumping up interest rates if inflation is non-existent.
The economic data might not have done much for the dollar and the pound, but their respective central bankers did put in a good words for their currencies. Bank of England governor Mark Carney contradicted his chief economist, Andy Haldane, who had suggested that UK interest rates might have to go lower. The governor said: 'We're still in a position where our message is... that the next move in interest rates is going to be up.'
His opposite number at the Federal Reserve, Janet Yellen, said pretty much the same thing. She pointed out in a speech that the Fed will not wait for inflation to return to its two per cent target before tightening policy, nor will it need to see wages increasing more quickly.
Carney and Yellen helped their currencies towards the front of the pack with their comments on Friday, but that was not enough to undo the bad work done earlier in the week.
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