Wot no fireworks?
Dodging a bullet
As usual when North America takes a holiday, the FX market ran out of steam at lunchtime. And it did not have that much steam to start with. The South African rand was the biggest mover, falling by -0.8% and sterling, on average, was flat.
The monthly round of manufacturing sector purchasing managers' indices was not helpful to sterling. Britain's figure came in two points lower on the month and two points below forecast at 54.3.
With the exception of Greece's 50.5 it was the lowest reading in Europe. It could have sparked a sterling selling spree but there was a limited response from investors, almost as if disappointment has become the new normal.
The pound did move lower against the North American dollars, which were Monday's joint leaders. So did the euro and the Swiss franc: the trio are unchanged on the day against one another and down by almost half a cent against the US dollar. The yen is slightly lower but its decline was brought to a halt when North Korea fired another missile across the Sea of Japan.
The only other currency to strengthen against sterling and the euro was the Norwegian krone. It gained support as a result of a one-dollar rise in oil prices. As was the case with sterling, there was little or reaction to the day's other economic data.
The best manufacturing PMI came from Sweden. It returned an outstanding 62.4, a monthly improvement of nearly four points. Switzerland also comfortably beat forecast with a not so shoddy 60.1 and Germany was quite close behind at 59.6. The two US measures from Markit and the Institute for Supply Management pointed in opposite directions, the Markit figure down by a tick at 52.0 and the ISM reading up by three points at 57.8.
The Australian dollar reacted negatively when, as expected, the Reserve Bank of Australia kept its benchmark Cash Rate steady at 1.5%. A comment in the RBA statement made clear it did not want the currency to strengthen and investors were apparently ready to oblige. The Aussie is half a cent lower on the day, as is the Kiwi.
As Americans celebrate 241 years of independence there are not likely to be any fireworks in the currency market. With the United States closed for the day London dealers will be drawing lots to decide which of them has to hold the fort this afternoon while the others leave at lunchtime.
On today's agenda there are no ecostats with global impact. The Riksbank rate announcement at half past eight could affect the Swedish krona, though no change is expected. Britain's construction PMI could conceivably affect sterling. The GDT index of dairy prices, which comes out this afternoon, has been known to move the NZ dollar. PMIs from Canada and Australia will probably have no effect on the Loonie and the Aussie.
So relax and enjoy it. Happy independence day.