As if to reinforce its reputation as an emerging market currency, for five days on the trot sterling took either first or last place among the majors. Friday, Monday and Wednesday brought the wins while Tuesday and Thursday delivered the wooden spoons. The net result was a pound just about unchanged on average over the week. Almost needless to say, Brexit hopes and fears were at the root of the triumphs and defeats.
The emergence last Thursday of a withdrawal agreement with the EU took sterling higher into the weekend, with the tantalising possibility that a theatrical Saturday session of Parliament might give its approval. On Sunday, reality set in and on Tuesday the technical defeat of Johnson's Withdrawal Act Bill knocked the pound back. Investors now have to weigh up about the possible impact of another general election on 12 December. Initially at least, they do not seem enthusiastic.
As sterling bounced across a two-and-a-half-cent range against the US dollar, the euro covered a distance of less than a cent, and did so mostly without any sense of urgency. It lost a net fifth of a US cent and gave up a sixth of a cent to sterling. Friday through Wednesday there were no euro zone economic data of any consequence. Tuesday's European Central Bank's bank lending survey did not set hearts racing and nor did news that Germany producer prices were all but unchanged on the month and year.
The pace picked up on Thursday with a flurry of provisional purchasing managers' index readings. As has become normal, German manufacturers stood out as the sick men and women of Europe, with their PMI mired in the shrinkage zone at 41.9. Euroland as a whole was described as "close to stagnation". Investors were not surprised.
Sterling's gyrations were a zero-sum game. The dollar was in the end unchanged on the week against the pound while it added a fifth of a cent against the euro. As in most of the world, US economic statistics were vanishingly rare for four days before coming in a rush on Thursday. Tuesday's existing home sales showed a 2.2% drop after two months of increases while Wednesday's even more easily-overlooked FHFA house price index put prices 0.2% higher on the month and 4.6% up on the year.
Thursday's provisional purchasing managers' index readings for manufacturing and services were closely-grouped at 51.5 and 51.0, demonstrating a "modest rate of business activity growth". A 1.1% monthly fall for durable goods orders was unusually close to analysts' predictions, as was the 0.5% decline in nondefense capital goods orders excl. aircraft. The 701k new homes sold in September were exactly in line with expectations.
Canada's general election was something of a damp squib. Incumbent Prime Minister Justin Trudeau won the battle - his Liberals are the largest party in parliament - but lost the war - he does not have a majority. The indications are that he will not form a coalition but will try to run a minority government with the cooperation of opposition parties. The Loonie was not hurt by the news. Indeed it added a third of a US cent over the week and picked up nearly a cent against sterling.
The Canadian dollar's gains came despite disappointing economic data. Retail sales edged down 0.1% in August, having been pencilled in for a 0.4% increase. A 1.2% decline in wholesale sales largely offset the previous month's 1.4% increase and fell well short of the predicted 0.3% rise. The Bank of Canada's Business Outlook Survey for autumn 2019 found that "business sentiment improved slightly, but regional differences are more pronounced".
A classic "game of two halves" took the Aussie higher last Friday and early this week and sent it back to the start in the later part of the week. It lost a net tenth of a US cent and gave up a third of a cent to sterling. The week's only Australian ecostats were the provisional purchasing managers' index readings, which clustered together at 50.1 for manufacturing and 50.8% for services. Both were above the breakeven line at 50 but not a long way above. The composite index at 50.7 indicated a "softer rise in activity".
A softening of the tone in America's trade war with China was positive for the Aussie, as it was for all commodity-related currencies. The latest development on that front came when US vice president Mike Pence said the US is not seeking to decouple from China.
Unusually, the Kiwi saw more benefit than the Aussie from an apparent thaw in Sino-US trade relations. On Monday, the US president's chief economic advisor Larry Kudlow told an interviewer that trade negotiations with China are "looking pretty good" and that "there is a chance we can get those December tariffs off". The two sides hope to have an agreement ready to sign by the time Trump and Xi attend the APEC meeting next month. The Kiwi was the day's top performer, though it was unable to hold onto its gains. It is unchanged on the week against sterling and the US dollar.
The NZ economic data told no compelling story. Credit card spending was up by 4.8% in September from the same month last year, a little less than forecast. The trade deficit for the same month was wider than expected while the shortfall for the 12 months to September was smaller than analysts had predicted.