Tripping over the polls

Extraordinary support

Over the long weekend a handful of currencies jostled to avoid taking home the wooden spoon. It ended up in the hands of the euro, which lost a fifth of a cent to the pound and the Swiss franc and little less than that to the South African rand.

There was no single point of failure for the euro. Its decline did, however, owe a good deal to Mario Draghi, the president of the European Central Bank. He told the European parliament that he was "firmly convinced that an extraordinary amount of monetary support is still necessary". The observation dampened expectations that the Governing Council might float the idea of a wind-down of the asset purchase programme next week.

An inch ahead of the euro the rand took a hit after South Africa's president Jacob Zuma won a vote of confidence from his party, the Africa National Congress. Investors had been hoping for his replacement by a more business-friendly leader. 

Growth and polls

Sterling lost an average of -0.4%, partly because of disappointing data for first quarter growth, partly because of opinion polls ahead of next week's general election and partly just because it is out of favour among investors. Its biggest loss was of -1.1% to the Japanese yen.

Thursday's revised figures for gross domestic product in Q1 put quarterly growth at 0.2% rather the 0.3% expansion previously announced. The change came as a surprise and therefore as a disappointment, especially as the downgrade related mainly to consumer spending.  Another concern to investors was the narrowing advantage, reported by opinion pollsters, of the Conservatives over the Labour party. It has fallen from 22 points to 5 in just two weeks.

The US dollar's performance was no better than average despite an upward revision to first quarter growth in the States, from 0.2% to 0.3%, and a lower-than-expected decline in durable goods orders. It added two thirds of a cent against sterling and three quarters of a cent against the euro. 

Yen starts in the lead

Japanese data this morning showed unemployment steady at a 20-year low of 2.8% and retail sales up by 3.2% from a year ago: For once, the yen received some help from positive domestic ecostats. There are no hugely-important data on today's list.

Other figures already out show Australian building permits increasing by a monthly 4.4% and Norwegian retail sales rising by 0.2%. France's economy expanded by 0.4% in Q1 and consumer spending was up by 0.5% in April. Spanish inflation was on target at 2.0%.

Swedish retail sales and Q1 growth are still to come, as are Italian producer prices, German inflation and a handful of EC confidence measures. North America data this afternoon cover Canadian raw material and industrial product prices as well as US personal income and spending, the Case/Shiller house price index and the Dallas Fed's manufacturing index.  Gfk's index of UK consumer confidence and the BRC's shop price come out tonight.