Last Friday the Federal Reserve chairperson, Janet Yellen, made a long-awaited pubic appearance. Investors were eager to hear whether she would endorse the comments made by her colleagues over the previous couple of weeks, pointing to higher interest rates in June or July. She sort of did, confirming that "probably in the coming months such a move would be appropriate". It was not warning that investors should gird their loins for a rate hike this month but Ms Yellen certainly did not rule out the possibility and her remarks were broadly positive for the dollar.
The US currency strengthened by a third of a cent against the euro over the week and by two and a half cents against the pound. Sterling came unglued after an opinion poll gave the Leavers a four-point advantage over the Remainers in the EU in/out referendum. The heightened uncertainty put investors off the pound.