0.3 or 0.2

Making the best of it

Despite the paucity of European and North American economic data on Tuesday investors still managed to find enough tradable nuggets to get currencies moving. They did not move far though, and in many cases the net change was minimal. By and large the "risky" currencies led the way as the safe-havens faded.

The appetite for risk was helped by OPEC's announcement that it will make further cuts to oil production. Whatever the doubts about the commitment of all the cartel's members to limiting supply, the news sent oil prices higher, with Brent crude topping $50. That, in turn, helped the currencies of oil and commodity exporters. The Norwegian krone was the winner for a second day with a gain of 0.3% over sterling.

The risk-on sentiment was of no help to the South African rand which, these days, ploughs a lonely furrow. Having come last on Monday it did so again yesterday. It was beaten by the safe-haven Swiss franc and Japanese yen but not by much: they were down by -0.7% against the pound. The US dollar and the euro were unchanged against sterling.

Antipodean central bankers unite

The Reserve Bank of New Zealand's John McDermott and the Reserve Bank of Australia's Philip Lowe were both offering their opinions overnight. Mr McDermott wanted to see a lower Kiwi dollar: Mr Lowe wanted workers to press for higher wages.

Mr McDermott did not really get what he wanted. In the immediate aftermath of his speech the NZ dollar even edged higher. But at least it is unchanged on the day against sterling. 

Mr Lowe's remark was a reiteration of what he has said before, and was a comment on the Australian CPI data that had come out an hour or so earlier: Inflation slowed from 2.1% to 1.9% in the second quarter. The governor also made clear that he is in no hurry to follow tightening moves by Canada and the States. The Aussie responded by losing three quarters of a cent on the day.

UK growth

Today brings the Office for National Statistics' first stab at UK gross domestic product in the second quarter of 2017. Growth is unlikely to have been impressive: it is more a matter of how weak the expansion was. This evening the US Federal Reserve is expected to leave monetary policy unchanged.

In the first quarter of the year Britain's economy grew by 0.2%, the feeblest performance in the G20 group of developed countries and weaker than anything from the rest of the EU. Analysts reckon that growth "accelerated" to a quarterly 0.3% in Q2. It is anyone's guess whether investors might react positively to a higher number than that but they would almost certainly take a dim view of a 0.2% or lower.

The Fed is unlikely to increase interest rates today. It might, however, say something concrete about winding down its stock of Treasury bonds. If so, the dollar should benefit.