CURRENCY UPDATE • THE EURO IN THE PAST MONTH
It all got a bit messy in December and at the beginning of January. Sterling strengthened by a cent and a half in early December, fell by three cents over the next fortnight, strengthened into the end of the year and has gone nowhere since then. The net result is a loss of just over a quarter of a cent for sterling against the euro.
For a change the confusion had little to do with Greece, Spain or Euroland. On the contrary, as the month wore on investors’ confidence in the single currency continued to grow. A year ago it was not outrageous to question the euro’s long-term survival in its current form and with its current members. The game began to change in summer when the European Central Bank president pledged to do “whatever it takes” to preserve the currency. As it happens, he has had to do almost nothing beyond repeating his commitment but his determination has inspired national leaders to step up to the plate.