From an economic point of view it was a quiet week for the euro. Industrial production in the euro zone was up by 1.4% on the year and 1.5% more people had jobs. April’s trade surplus was smaller than forecast. On the political front the picture was mostly positive: The party of Emanuel Macron, France’s new president, put in a good showing in the first round of voting for the legislature and the European Council approved the latest round of Greece’s bailout finance.
Following its post-election trashing sterling did reasonably well, strengthening by two thirds of a cent on the week. It was not easy going but the Bank of England did its bit to help. The Monetary Policy Committee kept Bank Rate unchanged at 0.25% but three of the eight members voted for an increase. That came as a surprise to investors and they marked up the pound.
The only two US ecostats that really mattered were retail sales and the consumer price index and neither of them looked very good from the dollar’s point of view. Sales were down by a monthly -0.3% and inflation slowed from 2.2% to 1.9%. Still, neither of them deterred the Federal Reserve from delivering the promised quarter-percentage-point interest rate increase.
The dollar went up by two thirds of a cent against the euro and it was unchanged against the British pound, which did fairly well following the beating it took in the immediate aftermath of the general election.
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