It was all happening. The New Zealand dollar hit a five-and-a-half-year low, the Australian dollar touched a six-year low and the Japanese yen traded at its lowest level in seven years. The Norwegian krone came within a whisker of a nine-year low and there were all-time lows for the South African rand and the Turkish lira.
Some of that was down to domestic difficulties. The yen lost ground after the Bank of Japan governor backed away from his suggestion the previous week that it was unlikely to fall further. The krone was hit by an unexpected central bank interest rate cut. But a good deal of sterling's relative success arose from it finding renewed favour among investors.
Wednesday's UK employment data played a big part in that improved sentiment. Average earnings excluding bonus payments increased by 2.7 per cent in the year to April, their biggest annual rise in six years.
The pound also scored points for being 'none of the above': Investors wanting to avoid the euro were less than enthusiastic about the US dollar after the Federal Reserve chairperson appeared to pour cold water on the idea of an early rate increase and they still didn't like the yen, especially after the BoJ governor's comments. So sterling got their vote almost by default.
The hot topic at the beginning of this week is the high-level meetings going on in Brussels to discuss the thorny issue of Greece and its debts.
Investors continue to believe that, because a compromise agreement is the only logical solution, one will be found. Eleventh-hour deals are what Euroland does, if not best, then at least most often. While there is no assumption that a deal will be finalised this week, investors are inclined to think that the basis for one will be established. If not, get digging.
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