USD 

It was a better than average day for the USD, with gains against the GBP and the EUR, but the dollar was off the pace of the leaders. A sell-off on Wall street, which took the S&P500 below its level at the turn of the year, was the sixth losing day in succession and it highlighted a broad concern about the durability of economic growth in America and around the world.  The US ecostats were a mixed blessing: new home sales fell for a fourth consecutive month, coming close to a two-year low, while the provisional Markit purchasing managers' index readings for manufacturing and services were higher on the month and better than forecast.  Overall the USD was up by 0.2% against the EUR.

EUR

Coming a day after some disappointing PMI readings on Wednesday, this morning's IFO measures of German business sentiment also missed the mark.  All three - for business climate, current assessment and expectations - were lower on the month and below forecast.  Attention now turns to the European Central Bank president's press conference this morning following the Governing Council's meeting.  The word on the street in Frankfurt is that he will not announce any changes to policy but he could well acknowledge that the economic outlook is not as positive as before.

CAD 

The USD lost 0.5% to the CAD, which led the way after the Bank of Canada announced an increase in its benchmark interest rate from 1.5% to 1.75%.  There was no surprise whatsoever at the rate hike but the BoC's statement did raise eyebrows. It claimed that "the global outlook remains solid", which will surely have come as a revelation to those investors who were dumping equities and piling into the safe-haven yen.  Nevertheless, the hawkish tone of the central bank's statement was more than enough to discourage the profit-taking sales which would normally have followed such a widely-expected rate hike. 

GBP  

A fall in mortgage approvals, according to the narrow BBA measure, was the last of this week's UK ecostats. Investors did not particularly care: they were far more interested in how the prime minister would fare in a scheduled meeting with the rank-and-file parliamentarians of her own party.  Some political commentators foresaw a metaphorical bloodbath that could lead to a vote of no confidence. In the event it turned out that everybody was supportive of Theresa May and she lived to fight another day. It did not do the GPB much good though: sterling fell 0.2% against the USD.

JPY

The USD lost 0.1% to the JPY.  It was looking at a bigger loss than that in the early hours of this morning but the JPY lost traction during early trading in London.  The story on Wednesday was clear enough: an exodus from equities and other "risky" investments went hand-in-hand with a flight to the safety of the yen. This morning, stock markets in Europe failed to follow Wall Street lower and that increased confidence was mirrored by a reduced appetite for the JPY.