The euro put in an above-average performance, strengthening by the best part of one US cent. It came nowhere near to matching what was a very good week for sterling, losing one cent to the pound. Sterling's success was mainly a function of improved sentiment; the euro's underperformance arose from a combination of rate expectations and economic data.

Whilst investors decided they could live with disappointing UK data for manufacturing and industrial production, growth (NIESR) and house prices (RICS) they were less tolerant of an unexpected fall in Euroland industrial output. The angle seems to be that softening €Z ecostats are likely to make the European Central Bank even more reluctant than it already is to tighten monetary policy. On the other hand, they are quite taken by the idea that in every April for the last 14 years sterling has strengthened against the US dollar.