Spread the joy
The theme yesterday, though it was not particularly coherent, was one of optimism. Investors continued to celebrate Sunday's French election result and they even managed to muster a little enthusiasm for the US president's imminent announcement on tax cuts. But the joy was not spread evenly.
Tuesday's winner was easy enough to justify. The krona strengthened by 0.8%, having been given a leg up by a fall in Swedish unemployment from 7.4% to 6.8%. It put the krona in the leading position for the week with a net gain of 2.1%. At the back of the field for the second time in three days the Japanese yen was down by 1.6% as a result of the evaporation in demand for safe havens. The yen's 2.6% decline over the last seven days leaves it at the back of the field.
The antipodeans did not benefit from the risk-on mood. Australia's dollar lost a net cent and a half to sterling after investors took a dim view of a lower-than-expected headline rate of inflation. At 2.1% it failed to match the 2.2% forecast. That figure also hurt the Kiwi, which was already on the retreat. It lost a net two and a half cents on the day.
Trump's tax plan
The US president is expected to reveal today his plan to slash corporate taxes. Anticipation of that announcement was of greater benefit to US equities than to the dollar. In Europe there was speculation that the ECB might be girding its loins to begin considering a possible wind-down of its quantitative easing programme.
Talk of a 10% tax on repatriated US corporate profits currently held offshore was positive for share prices but less so for the dollar. Investors suspect that the plan will not easily win congressional approval. The US dollar was down by half a cent on the day and the Canadian dollar took a proportionally-similar hit as it was dragged down by the Greenback.
The euro added a third of a cent, helped by speculation about European Central Bank policy. The story there was that the Governing Council might start to tone down its commitment to easing-without-end, not at tomorrow's meeting but at the following one in June.
Sterling could only manage third place, behind the krona and the euro, but it achieved it without any fuss or bother. On average the pound is unchanged on the week against the other major currencies. It is the clear leader over the last month, with an average gain of 3.5%.
Figures on Tuesday morning showed Britain's deficit - the gap between tax receipts and public spending - narrowing by 28% in the year to March. That took government borrowing to lowest level since 2008. The news did not do a lot for sterling but it did no harm.
There are no UK ecostats on today's agenda. The highlight will be Canadian retail sales, which are expected to be flat on the month.