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Well that was fun

And the winner is…

With a shrinking economy, a trade deficit and 15 years of quantitative easing under its belt, Japan's yen is not perhaps the intuitive pick for 2018's top-performing currency. But there it is, up by 8.3% from its position at the beginning of the year.

Away from the cacophony that is Brexit, Trump, Xi, 5Star, gilets jaunes and the rest, the yen stands almost alone as an island of calm. Japan's economic policy might not be the most successful but it is perhaps the most predictable. The Bank of Japan is making no effort to normalise monetary policy but its governor is seldom in the headlines and is not under fire from politicians.

In short, the yen is boring. When things get too hectic in Europe or North America investors find that comforting.  And there has been no shortage of hecticity in 2018, a year bracketed by Trump-inspired US government shutdowns and shot through with uncertainty about trade, Brexit and nationalism. When every other major currency is surrounded by question marks the yen is the safe-haven of choice for investors.

Tail-end Charlie

The biggest loser in 2018 was the South African rand, down by 7.9% against sterling. Among what are loosely called the major currencies the wooden spoon went to the Australian dollar, which is 3.3% lower on the year.

Although there were issues specific to each of them, their common problem was trade, or rather the lack of it. The US administration's trade war with Beijing  and the concomitant slowing of economic growth in China sapped demand for commodity-oriented currencies.

Away from the winners and losers the British pound struggled in mid-field, falling by an average of 0.8% against the other ten most actively-traded currencies. It was looking quite confident until the middle of April, when disappointing UK wages and inflation data coincided with heightened Brexit uncertainty, turning sentiment negative.

The final numbers

On average, Friday's ecostats were disappointing. One that did not disappoint, and the only UK statistic, was the BBA figure for mortgage approvals in November. At 39.4k it beat forecast.  

German import prices fell by 1.0%. Switzerland's leading indicator was two and a half points lower at 96.3. Spanish inflation slowed to 1.2% and German inflation was down from 2.3% to a provisional 1.7%. US pending home sales fell 0.7% in November. Currency movements were modest; the biggest was a half-cent decline by the euro. Sterling was on average unchanged on the day.

There is almost nothing on today's list, with only the Dallas Fed's manufacturing index yet to come. More interesting were the purchasing managers' index readings from China earlier this morning. The services sector looked chirpy enough at 53.8, half a point higher on the month, but manufacturing was half a point lower and into the contraction zone at 49.4.  It was the weakest reading in nearly two years.

ZAR the year's biggest loser

ZAR the year's biggest loser

AUD suffers as growth slows in China

AUD suffers as growth slows in China

JPY tops the league for 2018

JPY tops the league for 2018

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