Odds against the pound

No reason to buy
It has taken a little under 60 years, since Sputnik 1 went into orbit, for technology to advance to the point at which a rocket can make a controlled landing. Good job it didn't take that long with aeroplanes. Pity it still hasn't got there for sterling.

In fairness, the pound has not had a bad year. Since the beginning of January it has strengthened against everything except the US dollar, the Swiss franc and the yen, rising by an average of 7%. The last three months have not been so kind to sterling though. Only the rand, the Norwegian krone and the Canadian dollar have fared worse. And in the last week sterling has been the undisputed loser, down by an average of -1.2%. 

It would have been the biggest loser on Monday too, had the krone not been dragged a millimetre lower by an eleven-year low for oil prices. On the day sterling is down by a quarter of a US cent and three quarters of a euro cent. As in the last few days, there was no horrid news to provoke the selling but nobody could come up with any great reason to buy the pound.

Chinese stimulus
The antipodeans, meanwhile, were in the lead. Just as there was little justification for selling the pound, there was no obvious argument for their success. Clutching at straws, investors might have been motivated by reports that the Beijing authorities are calling for fresh economic stimulus.

According to the Xinhua news agency, the Chinese government's Central Economic Work Conference (doesn't sound the least bit communist, does it?) decided that monetary policy must be more "forceful" and fiscal policy more "flexible". The standard assumption is that stimulus in China translates into greater demand for Australia's natural resources and New Zealand's agricultural products.

There were no economic data from Australia or NZ and precious few from anywhere else. Consumer confidence inched higher in Sweden, as it did in Britain and Germany, while in Euroland it was fractionally softer. The CBI's Distributive Trades survey showed UK retail sales rising by less than expected in December.

Today's big-ticket ecostat is the revision to US gross domestic product for the third quarter. Britain's public sector borrowing figure plays a supporting role and there are balance of trade data from Switzerland and New Zealand.

The Swiss trade surplus for November came in a little over £2bn. In only two of the last 30 months has Switzerland reported a trade deficit, demonstrating that an unduly strong currency is not guaranteed to scupper exports if they are of decent quality. 

Analysts expect to see annualised growth of 2.1% for American GDP. That would be equivalent to quarterly growth of 0.5% and in line with forecasts for tomorrow's UK figure. Other US data cover existing home sales and house prices. The New Zealand trade figures come out tonight; a slightly narrower deficit is predicted by economists.