After a recent spate of disappointing performances, the euro managed to strengthen against the US dollar and sterling yesterday. While the move against the greenback wasn’t all that dramatic, it climbed significantly against the pound to reverse all of its recent losses and more besides.
The last few days have helped show that currency movements are not always centred on the region involved. The euro has strengthened against the pound for no other reason than the UK interest rate hike and the subsequent comments. It sometimes beggars belief that allusions to things that might happen in the future can have such a significant bearing on currency pairings, but there we go.
Having said this, the release of the German employment figures didn’t do any harm, as they came in slightly worse than expected. A forecast of 10,000 jobless claims actually came in at 11,000 but, again, this had little bearing on the single currency’s performance. Yesterday was all about the BoE decision and it is fair to say it didn’t disappoint – at least in terms of drama.