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EUR weekly

As investors swung from nervousness to confidence and back again the safe-haven euro rallied and dipped and rallied again. The first swing related to the US presidential candidate’s debate, which Donald Trump entered in the lead and came out of in second place. The first of three debates between Trump and Clinton drew more than 83 million viewers, making it the most-watched in history. A CNN poll showed that 62 percent of voters who watched the debate said Clinton won the discussion, compared with 27 percent for Trump.

The second swing was OPEC’s unexpected decision to cap production, which pushed up oil and equity prices as investor’s embraced risk. Then came the story of Deutsche Bank, which might or might not be in trouble as the result of a $14bn fine in the States which would account for half its market capitalisation. That made investors nervous again.

Messrs Yellen and Draghi were in contrasting moods this week. Stateside, Fed chairperson Janet Yellen played with a straight bat when quizzed about monetary policy. Yes, interest rates will eventually need to go up, but she’d didn’t shed any light on when that might be. Ms Yellen’s only concession was to advise the committee that the 2% inflation target is just that; a target, “not a ceiling”.

Over in Berlin the ECB’s Mario Draghi was far more forthright; informing those present that the Germans are actually doing quite well from the European Central Bank’s ultra-relaxed policy stance. He was adamant that negative rates are not responsible for the troubles of the German banking system.

Overall in the week the euro did not move far against the US dollar. It added a couple of dozen ticks having covered a range of just one US cent. The euro took nearly a cent off sterling, which suffered from another week of Brexit uncertainty.

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