USD: Investors favoured the USD yesterday, pushing it into first place with a gain of 0.5% over the EUR. There were no fundamental reasons for its success: US housing starts and building permits were far from special, with both measures falling in September. It was probably positive for the USD that the Treasury Department held back from calling China a "currency manipulator": a) because it isn't - the AUD and NZD have both depreciated by much more than the CNY this year and b) because nobody is hankering after a new front being opened in the trade war. The hawkish tone of the FOMC minutes was also positive for the USD but it had already done most of its work by the time they were published.
EUR: As Italy's coalition government pressed ahead with its 2.4% deficit budget for 2019 the EU Budget Commissioner (for there is one) was telling the media that he is "very likely" to reject it. Between them, they are setting the scene for a fiscal battle between the traditionalist European Commission and the populist Liga and 5Star leaders. Investors reacted by demanding a 305-basis-point premium for loans to Italy, twice as much as they required before the current proto-crisis began to blow up. They also held back from buying the EUR, which had a very ordinary day.
CAD: The Loonie had a worse one, falling by 0.7% against the USD. The only Canadian statistic on dealers' screens was manufacturing shipment for August. Whilst it is by no means the most important ecostat on the card, no joy was to be found in its 0.4% monthly decline. The CAD was heading lower ahead of the figure and it continued to do so afterwards. It delivered a worse performance than the other "commodity" dollars because oil prices were nearly 4% lower on the day.
GBP: Sterling enjoyed a brief respite from Brexit agonies. The prime minster was scheduled to meet EU leaders in Brussels on what investors already knew was a fool's errand. Theresa May duly re-offered her Brexit plan to the EU heads and they duly re-rejected it because they don't like the bit about the internal Irish border. No pain there for the GBP then, but it took a hit from below-forecast inflation numbers; the 2.4% headline rate was way off the expected 2.8%. A modest GBP recovery this morning was brought to a halt by another set of duff data. UK retail sales fell by twice as much as forecast in September. The British pound is therefore 0.3% lower on the day.
JPY: Despite strengthening by an average of 0.2% against the other major currencies the JPY lost 0.3% to the USD. Japanese trade figures released overnight were moderately helpful, in that the deficit was narrower than forecast. However, investors were not impressed that exports were 1.2% lower on the year in September while imports were up by 7.0%. The Bank of Japan governor did not help matters when he said in a speech that JPY interest rates will remain nailed to the floor for the foreseeable future.