Forex: Weekly review

The euro had a volatile week but still managed to fix gains against the dollar as risk appetite began to pick up towards the end of the week and drove the US currency lower.
Thursday’s disappointing data on first-quarter US growth and evidence of weaker consumer spending underlined the notion that the world’s biggest economy was still a long way from tightening its monetary policy.
After remarks from Jean-Claude Juncker that the International Monetary Fund would delay further aid to Greece if it were not convinced by budget reforms, the noise surrounding Europe’s periphery debt crisis quietened down during the G8 meeting on Friday.
Furthermore, news that Greek prime minister George Papandreou was to meet opposition leaders in a bid to achieve consensus on fiscal measures also helped calm the eurozone-related market jitters.
Meanwhile, the economic fundamentals in the US were in focus too and market players found them lacking. Investors were disappointed that the second reading of US growth data had not shown upward revisions to the anaemic 1.8% annual gross domestic product of the flash estimate.
The euro climbed 0.6% over the week versus the dollar, managing to rise off a one-month low. It remained 0.3% lower against the yen, and fell 0.8% versus the pound. The euro, having hit a record low against the Swiss franc, remained down by 1.8% over the week.
Sterling’s strong performance against the dollar came against the backdrop of Wednesday’s second reading of UK GDP data that confirmed the flash estimate of 0.5% quarter on quarter growth.
The pound climbed 1.4% over the week against the dollar, and gained 0.5% against the yen.
The yen strengthened versus the dollar last week, helped by Friday’s data that showed core consumer prices turned positive for the first time since February 2009. The yen gained 0.8% during the week.