Struggling for answers
Investors were in a quandary on Wednesday when it began to look as though the United States might not be the only major economy with a potentially widening deficit. Germany's Chancellor Merkel announced the formation of a coalition in which the SDP will control the finances.
After four months of discussion and significant concessions by Mrs Merkel's CDU it looks as though Germany will once again have a government. Whilst the lack of one has not done the euro any harm in the last four and a half months, the new coalition is likely to cut back on "austerity" and be more generous with its financial support for Euroland. The euro lost one US cent on the day and went down by half a cent against sterling.
The dollar, meanwhile, had a good day despite concerns about the US budget deficit. Cross-party discussions in Congress are heading towards a budget that will increase spending by "hundreds of billions of dollars" in the next two years, exacerbating the impact of December's $1.5tr tax cuts. The dollar's salvation was that Germany was the newer story.
If the higher dollar looked odd, the rising pound looked equally strange. Beaten only by the US currency it added an average of 0.5%. Having looked soggy in the morning, sterling spent the afternoon and most of the night heading higher.
Steady against the yen and the Canadian dollar the pound added half a euro cent and three quarters of a Swiss cent. Its success was at odds with the publication of a government assessment that every region of Britain will be adversely affected by Brexit. Conceivably the gains had something to do with less pessimistic outlooks from the economists at UBS and RBC.
The NZ dollar shared last slot with the Swedish krona, falling by 1.2%. Its handicap was a downgrade of the Reserve Bank of New Zealand's inflation forecast. There was no compelling reason for the krona's losses; Norway's krone took almost as big a hit.
Every quarter the Bank of England releases its Inflation Report at the same time as the Monetary Policy Committee policy decision and minutes. A press conference by the governor follows. There is usually nothing very super about it at all but that doesn't prevent investors hoping for the odd sliver of red meat. All of that kicks off at midday.
Today's agenda otherwise looks quite thin, though two Federal Reserve honchos will be on the podium. Friday brings more potential snares and tripwires for sterling. In the morning there will be data for UK industrial and manufacturing production as well as the balance of trade, all for December. In the afternoon the NIESR publishes its estimate of gross domestic product growth in the three months to January. The figures with potentially the biggest impact are the Canadian jobs data. Around 10k more people are expected to have found work in December, with January's unemployment ticking up to 5.8%.