Not surprising enough
To say sterling was the joint-weakest currency on Friday would be literally correct but misleading. The pound, the Japanese yen and the antipodean dollars all lost an average of 0.1% to the other majors, a rounding error in the great scheme of things. They lost 0.4%, or half a cent, to the leading Swiss franc.
Movement on Friday was generally modest, as it had been the previous day, despite the potential of significant data announcements. The US employment report was more or less in line with forecast. Although the 136k new jobs in September were fewer than forecast, taking into account revisions to earlier months there were 36k more people in work than expected. A slowdown in earnings growth from 3.2% to 2.9% was offset by a fall in unemployment from 3.7% to 3.5%, its lowest level in 50 years.
Investors were unable to overlook the disappointing US purchasing managers' index on Thursday. ISM's services sector PMI came in well below forecast, almost four points lower on the month at 52.6. It was the second big miss in a row from the ISM following Tuesday's manufacturing PMI, and the Markit version did not help, unchanged at 50.9. The dollar lost ground on Thursday before regaining the even keel which it maintained on Friday. It lost a quarter of a cent to sterling over the two days and gave up a fifth of a euro cent.
Brexit and impeachment
Just one of the PMIs on Thursday and Friday came in above forecast: Italy was four fifths of a point higher on the month at 51.4. Spain's reading beat Italy at 53.3 but fell short of forecast by a half a point. Britain's services sector was the only one in the sub-50 contraction zone, at 49.5. Investors were more interested in Brexit.
In the political world, the focus was on Trump's possible impeachment and Johnson's insistence that Britain could leave the EU without a deal on 31 October despite an express legal prohibition of that outcome. The UK government's proposal to Europe needs to win the approval not only of Brussels but of Britain's Parliament, and neither can be assumed.
The increasingly heated war of words between the US President and those who would impeach him has so far failed to rattle the dollar. For now, at least, the assumption is that Republican senators would not bring down their own President, so the would-be impeachers would fail to win the necessary two-thirds majority in the upper house.
When bad is good
On the basis that they who expect little are easily satisfied, this morning's 0.6% monthly fall in German factory orders was hailed as a triumph: orders were expected to have fallen 1.5%. The news did nothing for the euro. There is not a great deal more on the agenda.
All Europe can offer is Norwegian manufacturing output, UK house prices (Halifax) and Euroland investor confidence. Swiss foreign currency reserves also come out this morning.
No ecostats of any consequence are due from North America. There will, however, be an appearance this afternoon by Federal Reserve chairman Jay Powell.