At the beginning of the week it seemed that investors had transferred their affection from the pound to the euro.
On Monday morning the euro began to push ahead as soon as London opened. It received another nudge from stronger-than-expected German business confidence figures, becoming the day's top-performing major currency.
It didn't last long though.By Wednesday the pound had recovered its composure and it opened this Monday in London at the front of the pack, higher on the week by an average of 0.9 per centagainst the other dozen most actively-traded currencies.
It was not that the UK economic data were of any great help to the pound, it was just that they didn't do it any harm. The one that could have done was Tuesday's gross domestic product figure for the second quarter.
However, at 0.7 per centit was exactly in line with expectations and stronger than the 0.6 per centreported earlier by the US.The Canadian dollar was less fortunate on Friday when it was announced that the Canadian economy had shrunk by -0.2 per centin May.It was the fifth consecutive month of negative or zero growth: if there turns out to have been further shrinkage in June Canada will technically be in recession.
The spotlight this week will be on the Australian and US dollars as well as on sterling.For the Aussie the danger points are Tuesday's policy statement from the Reserve Bank of Australia and Thursday's jobs numbers.
Friday's American employment data will be critical to investors' expectations for US interest rates.
Sterling's moment of reckoning comes at midday on Thursday, when the Bank of England publishes not only the result of the Monetary Policy Committee's deliberations but also the minutes of the meeting.At the same time the governor will present the Bank's quarterly Inflation Report.
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