The euro rejoices after the Spanish government runs a successful bond auction.

On Monday and Tuesday the pound climbed from €1.2150 almost to €1.24 but it promptly turned tail. By Thursday it was back to its starting point and it moved lower still. The low point came on Friday afternoon, and is now uncertain about what to do next, see spread betting.

Most of sterling’s achievements last week were more the result of other currencies’ doings than of any effort on its own part. The few UK economic data were no less ordinary than those we have been seeing from elsewhere.

Money supply and mortgage approvals were unchanged from April to May. Gfk’s consumer confidence index was a point lower at -19 and Nationwide’s house price index was up by 0.1%. Purchasing managers’ indices (PMIs) for the manufacturing and construction sectors were slightly down in June but in line with forecasts at 57.5 and 58.4. As if to enhance the mediocrity, the Office for National Statistics had to postpone until 12 July the publication of its final revision to first quarter gross domestic product because it could not reconcile the data.

If mediocrity was the watchword for UK economic statistics, so it was for the euro zone evidence. The official EU measures of economic, consumer and industrial confidence were all very similar in June to their modest levels a month earlier. Germany lost another 21k jobs, leaving the rate of unemployment unchanged at 7.7%. Euroland consumer price inflation slowed from 1.6% to 1.4%. As was the case in Britain, the manufacturing PMIs for Germany and the euro zone were steady in June.

Unusually, the euro financial spread betting market prospered at the end of the week thanks to a relatively upbeat reading of the credit situation.

At the end of June the European Central Bank called time on its provision of one-year loans to commercial banks. Investors had feared that the banks would increase their use of the ECB’s three-month loan facility. They did, but to nowhere near the extend analysts had expected. The following day there was a positive reaction for the euro when the Spanish government ran a successful auction of €3.5 billion five year bonds.

Demand for the bonds was not as great as it might have been, and Spain had to pay a higher rate of interest than it would have had to do a year or more ago. However, the result was reassuring to the market, especially as ratings agency Moody’s had only recently threatened to downgrade Spain’s AAA credit rating.

That the French government successfully sold €7.5 billion of 15-year paper at the same time was rather less of a surprise.

Sterling has not gained a whole lot of ground since the budget a fortnight ago but investors see it once again as a ‘proper’ currency that they are prepared to buy as well as to sell. Although a short-term setback could cost the pound one or two cents.

FX Trading Update by www.moneycorp.com where you can open a free, no obligation Trading Facility.