There were some clear losers among leading currencies last week, but only really one winner. The pound, euro and US dollar all strengthened against the Australian, Canadian and New Zealand dollars, and the Norwegian krone, as commodity prices fell.

However, after a week dominated by political upheaval and central bank decisions, the US dollar rallied more than most, and for more traditional reasons on Friday. There were nearly three times as many Non-Farm Payroll jobs added to the US economy in October as had been expected. US unemployment fell to 4.1% – quite the achievement given that Canadian unemployment rose to 6.7%.

That was enough to shift expectations for the US Federal Reserve, with investors increasingly convinced that another interest rate rise is on the cards for December.

It all gave USD its best daily performance in months, taking some of the shine off sterling and the euro after earlier in the week when the dollar had been struggling as markets digested the Democrats’ sweeping victory in the US midterm elections. Wall Street’s enthusiasm for the result soon evaporated as concerns about the technology sector spread across global stock markets. The dollar benefited from that nervousness too, as investors sought somewhere safer to put their money.

The Bank of England’s own interest rate rise continued to divide opinion. Thursday’s increase to 4% was accompanied by a warning that UK inflation could approach 5% next year. Higher borrowing costs may support the pound, but they’re hardly cause for celebration among households and businesses already feeling the pinch.

This morning so far the pound has been looking bullish, gaining a little on the US dollar and close to that 1.20 level against the euro once again.

The focus now shifts to another busy week of economic releases. Tomorrow’s US inflation figures will be the first major test of the dollar’s renewed strength, while Thursday brings fresh UK growth (GDP) numbers. With the Middle East conflict still casting a shadow over energy prices, there’s plenty that could upset the current picture.