Chris Redfern Moneycorp

After two weeks at the back of the major currency pack, the US dollar stormed ahead, regaining the lead it last held in early March. Its place was taken by the euro, which lost a thumping five US cents and fell by nearly four cents against sterling.

For most of the week the dominant theme was inflation and its potential effect on interest rates. Sterling was first out of the traps with a headline rate of -0.1 per cent in the year to April.

Half an hour later Euroland came in with a 0.0 per cent. Because the UK figure was lower than forecast and the eurozone figure was in line with expectations, the pound briefly took a hit while the euro was unscathed.

On Wednesday the rand received some help from a higher-than-expected 4.5 per cent South African inflation rate and the US dollar got a boost on Friday when a below-forecast -0.2 per cent headline rate was more than offset by a core rate of 1.8% that beat expectations.

Any reservations investors might have had about low UK inflation were erased by the Monetary Policy Committee minutes, which revealed that two members gave serious consideration to voting for a rate increase, and an unexpectedly strong 1.2 per cent monthly rise in UK retail sales.

All the while, investors were becoming more twitchy about Greece. On Friday they became doubly so after the head of the European Stability Mechanism, Klaus Regling, warned there is 'little time left' to sort out a resumption of bailout payments.

Without them, Athens has said it will be unable to meet its obligations to the IMF in early June. It's the same old impasse. Greece says it is pointless to continue with austerity because the strategy is proven not to work: Germany says shut up and get on with it or there will be no more cash.