Marking time


Another day of not very much action saw the USD wander aimlessly along mostly horizontal channels with no destination in mind. Net movements against the biggest dozen currencies were small and ranges were narrow.

US economic data had the potential to move the USD but in the end investors did not rise to the bait. ADP's employment report saw private sector employment rising by 129k in March, less than the expected 170k but not different enough to affect the dollar. Both of the services sector purchasing managers' indices were lower on the month. The one from Markit was better than expected. The ISM version was a disappointing two points below forecast at 56.1 but still better than any of the readings from Europe.


The sum total of this morning's euro zone data was German factory orders. Analysts had predicted that they would be ugly and they turned out to be even worse. After falling 2.6% in January orders were down by another 4.2% in February, 8.4% below the same month last year.  

There was surprisingly little reaction from the EUR. Investors had apparently been prepared for nasty numbers and were not fussed about the degree of nastiness. The euro is down by 0.1% against the USD, in other words just about unchanged.


The currency that lives by the oil price dies by the oil price, and that was the situation in which the Loonie found itself on Wednesday. After touching a five-month high during the early London session WTI crude went into retreat. It only fell back by 1% but that was enough to put a dent in the CAD.

With no positive Canadian economic data - in fact no data at all - to balance the downward pressure the CAD moved lower too. It is down by 0.4% against the USD and the weakest performer among the big currencies.


Investors did not spend too long worrying about the recessionary implications of yesterday morning's sub-50 services PMI. They were more interested in whether the prime minister and the leader of the opposition would hit it off in their first ever serious attempt to cooperate on Brexit. The post-meeting noises were politely positive.

In the House of Commons, for the first time in living memory, MPs passed a major piece of legislation crafted by themselves, not by the government. Its aim is to prevent a no-deal Brexit. If there is a danger of one it requires the prime minister to ask the EU to extend the Article 50 time-frame. She would probably have done so anyway but parliament does not entirely trust her. Investors had seen it coming, so were more relieved than excited and made only a token upward adjustment to the GBP. It is a hardly-noticeable 0.1% lower on the day.


The yen is 0.1% higher. It, too, had an uninspiring day.

Even the economic data from Japan were uninspiring. The weekly stock-take of cross-border investment found Japanese investors buying $11.2 billion of foreign securities while foreign investors sold a net $3.9 billion of Japanese assets. The JPY needs something more exciting than that to get it moving. 

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