Sunday's controversial referendum on Catalonian independence was never going to be a bundle of laughs for the European Union or the euro. Hundreds of injuries in scuffles between police and voters did nothing to improve investors' perception of a community struggling to preserve unity. Yet the euro hardly suffered.
Yes, the euro opened lower in the Far East before recovering to Friday night's level and then heading lower. But ahead of the London session it was unchanged from Friday morning against the US dollar and an average of 0.2% higher against the other dozen most actively-traded currencies. Investors evidently did not see a danger of Spain being rent asunder or separatist activity spreading around the continent.
It will have helped that the economic data from around Euroland tended to paint a positive picture. Thursday's EC's measures of consumer and business confidence all met or exceeded forecast while inflation was steady at 1.5%.
Tuesday was a good day for the US dollar as it went three quarters of a cent higher against the euro and it picked up well over a cent against sterling. In part this was due to the market's cyclical distaste for the euro, in part it was the result of decent economic data.
It would be misleading to say that nothing happened in the FX market on Wednesday: there was movement but there was not much of it. Sterling's ranges against the euro and the US dollar covered just three quarters of a cent.
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