The pound was speeding in two directions at the end of the last week, with GBP/EUR flying high and GBP/USD in the doldrums.

Its fall against the US dollar can be firmly attributed to the success of the US economy, with the Federal Reserve’s preferred measure of inflation jumping again in May. However, the US economy is looking strong, with more than 2% annual growth in the first three months of the year.

Against the euro, traders felt able to relax as the replacement for Keir Starmer looks to be a done deal and the only question worrying the markets being the direction of Andy Burnham’s economic policy. He is preparing to set out his economic pitch, and markets will be listening for clues on tax, spending, devolution and the next chancellor. Last week GBP/EUR broke above the resistance level it had been butted up against for almost a year, but has since fallen below it again.

Europe has a similar, if less theatrical, problem. Inflation data is out this week but it looks to have moved back above the European Central Bank’s comfort zone of 2%, while growth remains patchy. That leaves the euro caught between support from higher rate expectations and concern that tighter policy could land on a still-fragile economy.

The week ahead should give currencies plenty to digest. Finalised UK growth figures (GDP) arrive on Tuesday, American jobs data lands this week too, and investors will keep watching whether the recent fall in oil prices feeds through into calmer inflation.

There is also the threat of fresh hostilities in the Middle East to consider. Just when it looked like the interim peace deal might hold, the United States struck targets in the region and president Trump once again threatened sweeping attacks on the Iranian regime. The price of oil moved little in overnight trading but it’s one to keep an eye on this week.