Previously this week the safe-haven currencies were in demand, equities and oil were on the retreat and the Norwegian krone was at the back of the field. All because of coronavirus. On Tuesday there was a rethink: the krone led the way and the Swiss franc fared even less well than sterling.
It would be handy to be able to ascribe the change of heart to a medical breakthrough or an upbeat set of economic data proving there was nothing to worry about. However, other than a strong set of results from Apple, there was nothing to celebrate. Even the Apple CEO admitted the virus was creating "greater uncertainty". Therefore, it appears simply as though the market had made a collective decision - if only a temporary one - to be less downbeat.
Having prospered with the safe-havens during the previous several days, sterling stumbled with them on Tuesday. It lost an average of 0.3%, giving up a quarter of a euro cent and a third of a US cent. It shared the penultimate slot with the NZ dollar.
Data don't help
With the exception of better-than-expected Swedish retail sales, Tuesday's economic data were mostly ordinary. US durable goods orders went up in December but the core component was lower on the month.
Durable goods orders increased by a monthly 2.4%, partially offsetting a downwardly-revised 3.1% decline in November. However, "nondefense capital goods orders excluding aircraft" - mainstream investment - was down by 0.9% and overall nondefense orders fell 2.5%. The US statistical narrative elsewhere was less dispiriting. Consumer confidence improved as a result of "increased optimism about future job prospects", while house prices rose 2.6% in the year to November. In addition, the Richmond Fed's manufacturing index improved by 25 points to 20.
Overnight Australia reported that consumer prices rose 0.7% in the fourth quarter, taking headline inflation for calendar 2019 to 1.8%. The "trimmed mean" measure of inflation came in at 1.6%, sufficiently high to give only a 10% likelihood to a rate cut by the Reserve Bank of Australia next week. The Aussie dollar shared second place for the day with Canadian dollar and Swedish krona, two thirds of a cent ahead against the pound.
Fed likely to stick
The biggest-ticket item on today's agenda is the Federal Open Market Committee's rate announcement and press conference this evening. Analysts expect the Funds Rate target range to remain unchanged at 1.5-1.75%.
Six weeks ago, the FOMC gave every sign that it would leave its benchmark interest rate unchanged for the entirety of 2020. Investors expect confirmation of that today, especially in view of the uncertainty created by the coronavirus outbreak.
Today's economic data are a fairly mundane bunch. Nationwide is expected to publish its house price index. German reports on import prices. There will be consumer confidence readings from Germany, France, Sweden and Italy. US data cover wholesale inventories, pending home sales and the trade deficit. New Zealand's trade figures come out tonight.