Daily Brief

Daily Brief

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Minimal movement among the big beasts

USD

There was minimal net movement on Thursday between the big five - the USD, EUR, CHF, JPY and GBP. All are slightly higher on the day against the rest of the field.  

Ecostats from the United States were mixed. The Philadelphia Fed's manufacturing index fell 21 points to -4.1 in February, a far cry from last Friday's equivalent measure from the New York which improved by five points to 8.8. Durable goods orders came in slightly below expectations with a 1.2% increase but were close enough to avoid embarrassing analysts who had forecast a 1.5% rise. Existing home sales were lower again, this time by a monthly 1.2%. Markit's (provisional) manufacturing and services purchasing managers' indices scored 53.7 and 56.2 respectively in February, diverging from what had been almost identical numbers a month earlier. There was nothing in any of the numbers to get the USD moving.

EUR

The accounts of the European Central Bank Governing Council's January meeting passed the buck, saying that downside economic risks were attributable to external factors, including trade protectionism and Brexit uncertainty. There was acknowledgement that "slowdown in euro area growth appeared to be deeper and more broad-based than previously anticipated" and "negative developments had become more widespread across the euro area". The outlook for the euro zone economy will be "reassessed in more depth at the next policy meeting in March.

Data this morning confirmed that Germany's economy stagnated in the fourth quarter of 2018. IFO's survey found that all three measures of business confidence - business climate, current assessment and expectations - deteriorated in Germany between January and February. Euro zone inflation came in exactly on target at 1.4% this morning. The EUR strengthened by an imperceptible 0.1%

CAD

Canada's two economic statistics were better than expected. ADP reported an extra 35.4k jobs in January and wholesale sales increased by 0.3% in December, partly offsetting the previous month's downwardly-revised 1.1% decline. The data did nothing whatsoever for the CAD, which turned lower shortly after they had been published. The downturn appeared to relate to a similar reversal in oil prices, which in the end were unchanged on the day. The Loonie is 0.14% lower against the USD.

A speech on monetary policy by Bank of Canada governor Stephen Poloz was not as illuminating as investors had hoped. He had to acknowledge that the future course of interest rates is "highly uncertain".  

GBP

Having been virtually unchanged until London opened this morning the GBP took a few steps to the rear before New York got under way. It is 0.4% lower on the day. The only UK statistic was the CBI's Distributive Trade Survey, which found that "retail sales volumes were once again flat in the year to February, confirming a subdued start to 2019".

After near-euphoria earlier in the week investors seemed to have toned down their optimism that all will be well with Brexit. EU sources are said to have dampened expectations that prime minister Theresa May will be able to secure a deal during an EU summit with the League of Arab States in Sharm el-Sheikh, scheduled for Sunday and Monday. Reuters reports the unnamed official as saying "there will be no deal in the desert".  

JPY

Another day of nothingness left the JPY 0.1% lower on the day after it went into reverse during the early London session.  

Overnight data from Japan put inflation at 0.2% in the year to January. Excluding food and energy, prices were up by 0.4% and with the impact of fresh food striped out they were up by 0.8%. All three numbers were in line with analysts' forecasts.

USD unmoved by mixed economic data

USD unmoved by mixed economic data

EUR unaffected by slower inflation

EUR unaffected by slower inflation

CAD almost flat after BoC governor speaks

CAD almost flat after BoC governor speaks

GBP lower as new Brexit deal hopes fade

GBP lower as new Brexit deal hopes fade

JPY steady following inflation data

JPY steady following inflation data

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