Pound powers on

Read the map

In the Daily Mail Roger McKinlay, a past president of the Royal Institute of Navigation (no, nor did the writer), warns that "blindly" following the instructions of their dashboard satnav makes users less aware of their surroundings. He advocates following maps, just as investors follow charts to visualise price changes.

A chart of price over time - a graph, if you like - shows not just where the market for an asset or currency is right now, it shows where it has been. Whilst history is no guarantee of future performance, the chart of sterling against the Australian dollar, for example, makes clear that the pound has been enjoying a significant rebound from its $1.83 low on 21-22 April. It is up by more than 7% from its trough.

But into every life a little rain must fall, and some of it fell on the sterling/Aussie exchange rate this morning when the Reserve Bank of Australia published the minutes of its last policy meeting, the one at which it lowered its benchmark interest rate from 2% to 1.75%. Investors had half expected the minutes to warn of further rate cuts. When they included no hint whatsoever of such a move the Australian dollar popped a cent higher, becoming the day's top performer with a net gain of half a cent.

What Brexit?

The British pound took a fairly easy silver on Monday, strengthening by an average of 0.7% against the other dozen most actively-traded currencies. There were no stunning UK economic data to help it on its way: sterling went higher simply because of an improvement in the opinion poll fortunes of the Remain campaign.

An ORB poll commissioned by the Daily Telegraph found 55% of respondents wanting to Remain in the EU and 40% preferring to Leave. It was an increase of four percentage points for the remainers since the previous poll last month. The bookmakers' prices also continue to indicate a Remain vote, with most of them quoting 3/10 on. Whatever the merits of staying or going, investors tend to be much more comfortable with the status quo than with uncertainty, hence sterling's upward move.

There was little else for investors to chase yesterday. In the States the New York Fed's manufacturing index disappointed with an 18-point fall to -9.02 and the NAHB housing market index was steady at 58. In South Africa the rumour that Finance Minister Pravin Gordhan is about to be fired made the rand the weakest performer for a second day.

Proper ecostats

There are some more heavyweight data on today's agenda, with consumer price index figures from Britain and the United States as well as US industrial production. Japanese gross domestic product comes out tonight.

The UK inflation data are something of a red herring: The referendum vote is far more relevant to interest rates than the minutiae of consumer prices.

The US figures are more important: A rate hike next month remains possible.