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JPY falls through technical support

USD

The dollar was no more lively on Friday than it had been the previous day. Other than the easily-overlooked Baker Hughes oil rig count (four higher on the week at 1049) there were no US economic data to educate investors' trading decisions.

There were tensions in the political arena. On the international trade front doubt was cast on the likelihood of a deal with China in time for the scheduled imposition of new tariffs, though the assumption remains that the deadline will be extended. Domestically, budget talks over the weekend failed to come up with a result acceptable to both the administration and Congress. Without one, another government shutdown will begin on Friday. None of this seemed to bother the USD.

EUR

Euroland had even fewer economic statistics to offer than the United States. None, in fact. That was unfortunate for the EUR, which could have done with some positive numbers to overwrite the memory of recent weak data. 

The tensions on that side of the Pond continued to centre on Brexit and the spat between Paris and Rome. There has been no improvement in intra-Euroland relations and the gilets jaunes protesters were out again in Paris for a 13th weekend. Until London opened this morning the EUR seemed impervious to such concerns but it began to head lower during the early Europe session. On the day it is 0.2% lower against the USD.

CAD

The Loonie had a good day on Friday, strengthening by 0.3%. It got a lift from the Canadian employment data, even though not all of the numbers were impressive. There was a particular miss for unemployment, which increased by more than expected to 5.8%. But the good news was a 66.8k leap in payrolls, smashing the forecast 8k increase. Average hourly wages were helpful too, rising by 1.82% in the year to January and beating December's 1.49% annual increase.

Had it not been for oil prices the CAD would have probably had an even better day. As it was, they went nowhere.

GBP

Sterling would have been grateful to avoid a raft of UK economic data this morning, just about all of which came in below forecast, lower on the month or both. Top billing went to fourth quarter gross domestic product, which expanded by a quarterly 0.2%. Growth for 2018 as a whole was 1.3%, down from 1.5% in the year to September. Monthly declines of 0.7% and 0.5% for manufacturing and industrial production left them lower on the year by 2.1% and 0.9% respectively. Business investment declined by 1.4% in Q4 and was down by 3.7% on the year.

There was only marginally better news on Brexit. The prime minister welcomed a proposal from the leader of the opposition and then promptly told him it was unacceptable for Britain to remain in the customs union. Even after all that, the GBP is only 0.2% lower against the USD.

JPY

The yen spent Friday going nowhere. In the Far East this morning USD/JPY edged higher and in early Europe was trading close below important technical resistance at ¥110. When London opened, somebody evidently decided to take it for a walk. The resistance at ¥110 gave way and the USD headed north. The JPY is 0.4% weaker on the day.  

There is no fundamental reason for the move to have taken place this morning: there were no data or news from Japan to alter the picture. It was probably just an opportunistic gambit that happened to pay off. The important test will be whether USD/JPY continues higher or drops back to the 110 level.

USD unfazed by trade and shutdown

USD unfazed by trade and shutdown

EUR beset by intra-Euroland spat

EUR beset by intra-Euroland spat

CAD higher after surprise payrolls jump

CAD higher after surprise payrolls jump

GBP discouraged by dismal data

GBP discouraged by dismal data

JPY lower after chart support gives way

JPY lower after chart support gives way

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