Rumours hit jumpy FX markets

The dollar staged a rally against the euro to around $1.078 from $1.106 at the start of the week. The yen weakened to around 118.7 yen per dollar, easing fears of further Bank of Japan intervention. After weeks of rangebound trading, the return of volatility was welcomed. "I wish I’d put my life savings on volatility at the start of this week," one market participant told FX Week.

The overriding theme last week was of frantic diplomatic haggling, mostly on the part of the US and UK, but mark