Waiting for Phil

Commonwealth dollars diverge

Only the Canadian dollar offered any real competition to the US dollar in the last week. Not only did the it put up a fight, it won it: the Loonie is a net four cents higher against sterling where the Greenback could only pick up two cents over the seven days.

The Loonie's advance had more to do with oil prices and the close economic ties between Canada and the States than it did with the Canadian economic data. Friday's consumer price index figures were, if anything, unhelpful: whilst the headline rate of inflation was steady at 1.5% the Bank of Canada's "core" measure slowed from 1.8% to 1.7%. Oil starts this week higher than it began last Monday, mainly because investors see a greater chance that OPEC will cobble together some deal to limit output.

As the Canadian dollar added a cent and three quarter over the weekend the Australian dollar lost three quarters of a cent, putting itself at the back of the field. The Aussie did nothing wrong: there have been no significant Australian economic statistics since Thursday morning's employment data. However, the anticipation of higher US yields seems to be undermining appetite for the Aussie, which has also broken down through technical support against the US dollar.

Sterling rests on its laurels

The pound had a reasonably positive day on Thursday but rather took its eye off the ball the following day. Over the last week it is on average -0.3% weaker against the other dozen most actively-traded currencies.

Thursday's gains came after a solid set of figures showed UK retail sales rising by a strong 1.9% in October, putting sales an impressive 7.4% ahead of the same month last year. That said, there was no obvious connection between the data and the pound's outperformance: at the time there was no particular reaction.

On Friday, with no news or data to assist it, sterling's only gains were against the antipodean dollars. It lost half a cent each to the US dollar and the Swiss franc and was down by three quarters of cent against the euro.

Autumn statement

This week's FX market got off to a slow start in the Far East. News of a narrowing Japanese deficit did not really help the yen because imports and exports were both down by double-digit percentages on an annual basis. The euro got some help from the French primary election result.

François Fillon easily beat Nicolas Sarkozy in the first round of the contest to select the centre-right candidate for next year's presidential election. M. Fillon is seen as more likely to be able to beat the FN's Marine LePen in the general election. The news was vaguely helpful to the euro this morning. There are no significant ecostats on today's agenda.

The highlight for the pound this week will be the chancellor's autumn statement on Wednesday. With Brexit in mind it will carry more than the usual weight.