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Pound reacts to Brexit uncertainty

USD

The monthly change in US durable goods orders is the statistic analysts love to hate, because it is almost impossible to predict with any accuracy. For that reason it is one of the most tradable ecostats out there. For the January numbers published on Wednesday the forecasts were that the headline figure would show a 0.5% decline with the "core" measure, ignoring transportation items (trains and boats and planes) rising 0.1%. The actual numbers were +0.4% and -0.1%.

The decline in ex-transportation orders was cause for concern with some analysts because it could be a symptom of a pull-back in business investment. There was no strong reaction from the USD but after the data came out it tended to move lower.

EUR

Inflation data from Germany and Italy were the only euro zone ecostats this morning. Germany's domestic statistics bureau showed inflation slowing from 1.6% to 1.5% while the EU's Destatis office put the harmonized CPI for Germany at an unchanged 1.7%. In France the harmonized index showed inflation accelerating from 1.5% to 1.6%.

Benoît Cœuré, an executive member of the European Central Bank's board, made an appearance in Milan, Italy. All he really brought to the table was a warning that Italy faces a technical recession and is challenged by longer-term growth prospects. Investors already knew that. They took the EUR 0.2% higher against the USD.

CAD

It was not an historic day for oil prices but WTI crude managed to creep 2% higher. With nothing better to do, the Canadian dollar tagged along, closely matching the shape of oil's trajectory. It is up by 0.4% against the USD.

The only Canadian statistics on Wednesday came in the Teranet–National Bank house price index. In the country as a whole prices fell 0.4% in February. Prices were lower in 9 of the 11 metropolitan areas, the biggest fall being 2.0% in Victoria. "Except for the recession year of 2009, it was the largest February decline in 19 years of index history." There is more on house prices today with the Statistics Canada new housing price index.

GBP 

Today's UK house price statistic came from the Royal Institution of Chartered Surveyors, the realtors' professional body. Its house price balance fell to -28, its lowest level since 2011. The RICS report noted that "77% of respondents cite Brexit uncertainty holding back sales activity".

Parliament attempted to get rid of some of that uncertainty when it voted to prevent Britain leaving the EU without an agreement. Although the motion was only advisory, and did not amount to legislation, investors ran with the idea, sending sterling into the lead for the third time in six days (on two of the other four days it came last). The GBP is 0.9% higher against the USD, having touched an 11-month high along the way.

JPY

The JPY fell out of the trading range it had occupied for nearly a week, losing 0.4% to the USD to become the day's biggest major-currency loser. Its decline began during the early afternoon in New York and continued overnight.  

There were no Japanese economic data to affect the currency. Its problem was the nearby technical resistance for USD/JPY, which presented an irresistible challenge to investors.

USD Held back by worries about business investment

USD Held back by worries about business investment

EUR European Central Bank exec sees challenges ahead for Italy

EUR European Central Bank exec sees challenges ahead for Italy

CAD Moves higher in lockstep with oil prices

CAD Moves higher in lockstep with oil prices

GBP Back into the lead after parliament "rules out" no-deal Brexit

GBP Back into the lead after parliament "rules out" no-deal Brexit

JPY The biggest loser as technical support breached

JPY The biggest loser as technical support breached

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