No appetite for sterling

Investors not hungry

Researchers have discovered that diners in self-service restaurants take less if they are given smaller plates. The scientists at Cornell University also found that people order more food from fat waiters. So sterling must have been offered by skinny waiters on small plates yesterday.

The pound was not quite the weakest performer on Tuesday. It picked up a quarter of a Japanese yen and lost out to the euro by only a handful of ticks. But during the morning and most of the afternoon it was under sustained pressure. At one point sterling was down by one euro cent and nearly two US cents. The reason for the rout was a dismal set of UK output data which showed manufacturing production falling by -0.4% in November and the broader industrial production (including energy) declining by -0.7%.

Sterling was rescued from what could have been a disastrous day by the National Institute for Economic and Social Research's estimate of gross domestic product in the last three months of 2015. The NIESR put quarterly growth at 0.6%, the same pace as in Q3 and evidently faster than investors had been expecting. So it was just another bad day for the pound, which lost a net two thirds of a US cent and fell by an average of -0.7% - equivalent to one and a half NZ cents - against the other dozen most actively-traded currencies.

Brighter China

The Chinese trade figures for December, released earlier this morning, were the first decent set of ecostats to emerge from Beijing for some time. They were positive for the commodity-oriented currencies and negative for the safe-haven yen.

Chinese imports were down by an annual -7.6% and exports by -1.4% but exports increased by 2.3% on the month and the -4% fall in imports was only half of what analysts had predicted. The data are not necessarily a sign that China's economy has turned a corner but they are at least a reassurance that things are not, for the moment anyway, getting worse.

The Japanese yen ended up as the day's biggest loser, with the pound and the euro not far ahead. South Africa's rand was the leader by a mile, strengthening by nearly 3% against sterling and halving its losses for the year to date. The Canadian dollar kept pace with the US one, adding a cent against the pound, while the Aussie's two and a quarter cent rise was twice that of the Kiwi.

Australian jobs

There are no UK data on today's list and precious little from Europe or North America. The Australian employment figures come out tonight.

This morning's Euroland industrial production data count for little, being aggregates of previously-published national data. The Federal Reserve's Beige Book this evening will be interesting rather than market-moving.

The figures that will make the most difference will be the jobs numbers from Australia tonight. They frequently move the Aussie dollar, if only because of their unpredictability.