Daily Brief

Daily Brief

See recent articles

GBP leaves the other standing

USD

Once again the USD was just about unchanged, on average, against the other major currencies. It weakened during the early New York session, steadied overnight and moved higher in Europe this morning. Swaying sentiment regarding the global economy was said to have played a part.

US economic data had little to do with it. MBA mortgage applications were down by a weekly 2.7% following a 13.5% increase. The Redbook index showed retail sales falling 1.5% and the Richmond Fed's manufacturing index improved by six points to -2. Investors remain in the dark about the effect of the government shutdown on the economy because that very shutdown means the data upon which they - and the Fed - rely are not available.

EUR

The European Commission's index of consumer confidence improved by a scant half-point in January to a provisional -7.9. Investors were not particularly impressed. They were even less impressed by this morning's preliminary purchasing managers' index readings from around Euroland. In France the manufacturing PMI was in the growth zone at 51.2, beating forecast, while services and the composite measure showed contraction at 47.5 and 47.9 respectively.  

The most salutary message came from Germany, where manufacturing slowed to 49.9. For the euro zone as a whole, readings of 50.5, 50.8 and 50.7 were on the cusp of a slowdown. Yesterday's gains for the EUR were quickly handed back this morning to leave it unchanged against the USD.

CAD

Statistics Canada reported that "sales at cannabis stores increased 26.2% in November to $54.4 million". Unfortunately, that growth was not matched across the entire retail sector. General merchandise sales were up by 1.7% on the month while gasoline, motor vehicles and parts and food and beverage stores all recorded falling sales. The overall 0.9% monthly decline was bigger than the -0.6% that analysts had predicted and the CAD lost half a cent in short order. It is a net 0.2% lower on the day against the USD.

A 50-cent decline in oil prices did not help the CAD's case but it was not a significant move. The story on US trade with China was fluid; not clear enough to send the Loonie one way or the other.

GBP

For the fourth time in six days the GBP showed the other major currencies the way. It strengthened by an average of 0.9%, rising 0.5% against the USD. The pound is the top performer over the last week and month, a clear 1% ahead of its closest competitor.

As has been the case for a while, it is Brexit hopes and fears that have the biggest impact on the GBP. Currently it is hope that does the driving. Investors believe that the cliff-edge will be avoided on 29 March because Parliament will prevent it, maybe by postponing the departure date. Michel Barnier, the EU's chief negotiator, is more wary. He said in Brussels yesterday "Leaving the EU without a deal is the default scenario and there appears to be a majority in the House of Commons to oppose a no-deal. But opposing no-deal will not stop no-deal from happening at the end of March."  

JPY

The JPY was among the ranks of the non-movers, remaining within a one-yen range throughout the day. Investors' hopes and fears were roughly in balance and there was no move into, or out of the safe-havens.

The only Japanese statistic was the Nikkei flash manufacturing PMI. At 50.0 it was two and a half points lower on the month and exactly at the level which divides boom from bust. The report noted that "production scaled back for the first time since July 2016 while confidence [was] the lowest in over six years".

USD mostly unchanged, awaiting PMIs

USD mostly unchanged, awaiting PMIs

EUR flat after PMIs send it back down

EUR flat after PMIs send it back down

CAD lower following retail sales disappointment

CAD lower following retail sales disappointment

GBP benefits again from Brexit optimism

GBP benefits again from Brexit optimism

JPY steady despite manufacturers flat-lining

JPY steady despite manufacturers flat-lining

Sign up for a free account

Sign up for a free account

Access our convenient and secure online platform to process your international payments. Manage beneficiaries and view payment status and history at the click of a button.

Find out more
FX business solutions

FX business solutions

We provide tailored services to help companies make international payments and manage their foreign exchange risk

Find out more