Daily Brief

Daily Brief

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Two on the move

Nine going nowhere

Most of the ten other most actively-traded currencies are unchanged, or almost unchanged, on the day against sterling. The outliers are the safe-haven yen, which is 0.4% firmer, and the relatively volatile South African rand, down by 1.7%. Among the main bunch the Canadian dollar fared least well, losing two fifths of a cent or 0.2%.

There was very little for investors to get their teeth into on Tuesday, at least as far as exchange rates were concerned. The only obvious target was the swearing-in of David Mabuza as South African president Cyril Ramaphosa's deputy, three weeks after the general election. Mr Mabuza's name is linked to a range of allegations, including vote-rigging and favouritism in awarding contracts. Although he has been cleared by the ANC, investors are unhappy that the government did not make a better show of distancing itself from corruption.

The yen had a patchy day, weakening in the morning before heading higher after lunch and overnight. Its upward move coincided with a decline in US equity prices. Both were driven by increased concern about the trade war and its potential to handicap global growth, especially after China threatened to escalate the tech cold war by restricting exports of rare earth elements.

Consumer confidence

A slack handful of consumer confidence measures from Europe and the States showed mostly healthy sentiment on both sides of the Atlantic. On the other side of that coin, the Dallas Fed's manufacturing index dropped seven points to -5.3.

In Germany and Sweden consumer confidence faded slightly. In Euroland the EC measure improved from -7.3 to -6.5.  In the United States the Conference Board's index was up by five points at 134.1. The EC survey also found improvements in services, industrial and economic sentiment.

The remainder of Tuesday's evidently forgettable data showed rises for UK mortgage approvals and euro zone private loans as well as slowing growth in US house prices. The BRC index of UK shop prices put them 0.8% higher on the year.

Bank of Canada decides

The highest-profile item on today's agenda is the Bank of Canada's policy announcement this afternoon. Most analysts expect the bank to keep its benchmark interest rate unchanged at 1.75%. The ecostats on the list are not the stuff of legend and those announced so far have had little effect.

Improvements in ANZ's New Zealand business activity and confidence measures were of absolutely no help to the Kiwi, which was heading lower as London opened. By the same token, rising Norwegian retail sales, and a recovery in French consumer spending made no difference to the krone or the euro.

Later this morning Sweden will report on first quarter growth, Germany on unemployment and Italy on business and consumer confidence. ZEW's survey of Swiss business confidence comes out at the same time. After lunch the Richmond Fed publishes its manufacturing index.

GBP: Mostly unchanged on the day

GBP: Mostly unchanged on the day

USD: Improved consumer confidence

USD: Improved consumer confidence

ZAR: Hurt by cabinet appointment

ZAR: Hurt by cabinet appointment

JPY: Safe-haven from trade wars

JPY: Safe-haven from trade wars

CAD: Bank of Canada expected to stick

CAD: Bank of Canada expected to stick

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