Status quo

Softer ride

Researchers have discovered that LEGO has become "more violent" over time, with an increase in the number of belligerent themes such as "Star Wars" and "Marvel Civil War". But the company is said to have rejected a "Brexit War" theme because of its excessive brutality. Investors apparently concur. 

After its profit-taking wobble on Friday the pound got back onto its horse yesterday. It strengthened by an average of 0.2% against the other dozen most actively traded currencies, not a huge gain but enough to retain its position as market leader over the last week and month. It will have helped that a Daily Telegraph opinion poll gave the Remainers a 55-42 lead over the Leavers and the bookies' odds against Leaving widened to 4/1.

The numbers reassured investors that the status quo was not in imminent danger of being jettisoned and they sent sterling higher on most fronts. Apart from the loss of a dozen ticks to the Swiss franc and a quarter of a cent to the US dollar, the pound's only setback was against Monday's top performer, the Japanese yen. It went down by one and a quarter yen, 0.8%, after the US treasury secretary warned his opposite number in Tokyo against deliberately devaluing the currency.

Back to back

Hardly a day goes by without one or more of the Federal Reserve leadership warning that US interest rates are going up, maybe as soon as next month. Three of them were at it yesterday, with Patrick Harker looking for "two or perhaps even three rate hikes over the course of the year". 

The Philadelphia Fed president is not currently a voting member of the Federal Open Market Committee. Neither is his San Francisco colleague John Williams. But both gentlemen echoed yesterday's third speaker, James Bullard of the St Louis Fed, who is. Mr Bullard also said the FOMC would not be deterred from a rate hike on 15 June by the following week's Brexit referendum.

Investors are still taking the idea of a June rate increase with a pinch of salt but few can be in any doubt that, unless something goes horribly wrong with the economy, US rates will be heading north for the summer. Yesterday's modest quarter-cent dollar rally reinforces that idea.

On the level

Monday's economic statistics did not add much to the currency debate and today's look equally as unpromising. It could, once again, be central bankers that capture investors' attention, even though the Fed is taking the day off.

Glenn Stevens of the Reserve Bank of Australia has already said his piece, dropping heavy hints that lower interest rates are around the corner. The Aussie has fallen by more than a cent and a half since his remarks.

Peter Praet, of the European Central Bank's Executive Board, takes to the dais as London opens. An hour later Riksbank governor Stefan Ingves will reveal whether the Swedish central bank has adjusted its benchmark repo rate, currently -0.5%.