By Nigel Hodges of Currency Solutions

This has been a week of superlatives for many currency speculators. While exciting records have been broken in other places, particularly with Phelps in the pool, currencies seem to have plunged to new depths and inflation scaled new heights amidst the rash of data released this week detailing economic performance in the second quarter of 2008.

Most significantly for the Euro is the news that the European Central Bank has reported negative growth for the second quarter with the economy contracting by 0.2%.

Here we are seeing the effects of commodity prices which spiralled earlier in the year, driving up inflation and eating into the margin of growth. It is the first time growth has contracted since the inception of the Euro and consequently, the Euro slumped against all major currencies.

News for the UK has been in the same spirit as the European summer; dismal.