The struggle continues

Sterling avoids whitewash

It was another losing day for sterling, which fell by -0.3% on average against the other dozen most actively-traded currencies. There were no UK economic data to take the blame for its slippage, which was caused by the relentlessly negative sentiment.

Mercifully, the pound managed to avoid a hat-trick with the wooden spoon, conceding that dubious honour to the NZ dollar. There had been a suspicion that Reserve Bank of New Zealand assistant governor John McDermott would touch on monetary policy in his speech to businessfolk in Rotorua: The clue was in the title - "Understanding low inflation in New Zealand". Sure enough, Dr McDermott dropped the bomb towards the end of his address: "Our current projections and assumptions indicate that further policy easing will be required…". The NZ dollar took a couple of steps backwards for a daily loss of just under a cent.

The yen also lagged behind sterling, falling by -0.3%. A mixture of factors were at work there, including comments by Bank of Japan governor Kuroda San about his readiness to increase and extend the bank's quantitative easing scheme, the interest rate gap between the yen and the dollar, a higher oil price and the fading threat of a Donald Trump presidency in the United States.

North Americans ahead

The Canadian dollar was the clear winner on the day, rising by 1.2% against sterling. America's dollar shared second place with Norway's krone, both of them going up by 0.7%. For the Loonie and krone Vladimir Putin was the trump card: for the Greenback it was the trumping of Trump.

It took a while for investors to conclude that Hilary Clinton had beaten Donald Trump in Sunday night's candidates' debate. However, as Monday progressed and more of Mr Trump's supporters jumped off his bandwagon, it began to look ever less likely that he would make it to the White House next January. That was seen as a good thing for the US dollar.

The Russian president helped oil prices higher when he expressed support for OPEC's plan to limit production. Some doubt that Russia's cooperation will have much impact on the bigger picture but it sounded positive and took the price of oil close to a 15-month high. The currencies of oil-producers Canada and Norway responded accordingly.

Sterling on the defensive

Tuesday began with the pound once again on the back foot. As usual there was nothing concrete to take it lower but the uncertainty surrounding Brexit was more than enough to do the job.

Another short ecostat agenda today brings almost nothing to distract from the War on Sterling. Swedish unemployment and inflation this morning will be important to the krona, as will ZEW's surveys of German and Euroland business confidence to the euro. Canadian housing starts could conceivably affect the Loonie. Australian business confidence comes out tonight, along with Japanese machinery orders.

No UK data appear on the list: their absence is unlikely to help sterling.