After a month of initially slow, then rapid upward progress the pound came to a halt on Monday as investors paused for yet another reassessment of what President Trump will mean for the global economy. Sterling was the weakest performer among the major currencies, though only by a whisker.
The Japanese yen and the Swiss franc beat the pound by only a dozen ticks and they, in turn, were no further than that behind the euro. At the front of the field the NZ dollar had an equally narrow lead over the US, Canadian and Australian dollars and the South African rand, which were unchanged against one another. It had all the hallmarks of a "risk-on" day as the safe-havens were left behind by the commodity-exporters.
Economic data had no bearing on the action. Euroland industrial production fell by -0.8% in September, less than expected. New Zealand's retail sales data failed to appear because the earthquake has disrupted Statistics NZ's IT capability. Speeches by the ECB president and the UK prime minister brought nothing to the debate. Mario Draghi's was a eulogy to Carlo Ciampi, the erstwhile Bank of Italy governor who rose to become president. Theresa May's was a call for a Brexit that "works for all".
The Trump effect
After a false start in the immediate aftermath of Mr Trump's election win investors decided on a plan of action. They bought commodities and dollars and sold bonds. Copper has had its best weekly gain in 35 years and bond prices are down by $1tr, the biggest rout in a year and a half.
Investors are doing exactly what they did following Britain's EU referendum: attempting to discount instantly the effects that they expect to see over several years. They believe tax breaks will hugely increase America's deficit and, with it, government borrowing. They also expect infrastructure investments to boost demand for metals, including iron ore, and for the coal used in steel-making.
"Too much too soon" springs to mind. But that doesn't mean the action will end in the near future and the prospect of rising inflation and higher interest rates should keep the dollar underpinned.
Lots of numbers
After several almost ecostat-free days there will be a plethora of data today from Europe and the States. At last investors will have something to distract them from what the president-elect might or might not do.
Germany has already revealed slower-than-expected 0.2% growth in the third quarter , casting doubt on the 0.3% expected from pan-Euroland later this morning. There are inflation figures from Sweden and Britain and ZEW reports on investor confidence in Germany and the euro zone. After lunch come the US data for retail sales and import/export prices. NZ retail sales have been rescheduled for tonight.
At ten o'clock the Bank of England governor and three other MPC members will attend parliament's Treasury Committee. They will answer questions on the bank's quarterly Inflation Report and the economic forecasts therein.