Fed decision

Four out of four

A decline in smartphone sales has knocked 8% off Apple's share price. It is a reminder that you can't endlessly sell the same thing over and over again (unless it is a consumable like bread or gin). For four months investors sold sterling over and over again and that, too, has now run its course.

As with Apple and its smartphones, there will still be some out there trying to sell the pound but, for now, the stampede is over. For a fourth day in succession sterling was the top performer. It was not a walkover - the pound had to share the top slot with the Canadian dollar and the Norwegian krone. Even so, the trio strengthened by an average of 0.4% against the other ten most actively-traded currencies. 

Sterling's four-day fight-back has earned it a net 2.4% gain that includes four and a half yen, two and a half US cents and two euro cents. Whilst it would be rash to assume that the Brexit threat has been eradicated by President Obama's intervention, it has at least been diminished. 

Commodity dollars diverge

The Canadian dollar shared the lead position with sterling while the Australian dollar took a -1.5% caning. In both cases it was the outlook for interest rates that drove the move.

The Loonie took its cue from Stephen Poloz, the governor of the Bank of Canada. He said in a speech that whilst negative Canadian interest rates could not be ruled out, the central bank was "quite far" from considering such extreme stimulus. Investors took his comments to mean that rates would not be cut unless some new economic shock were to arise.

It was an unexpected fall in consumer prices that downed the Aussie. They declined by -0.2% in the first quarter, pulling the headline rate of inflation down from 1.7% to 1.3% and lowering the Reserve Bank of Australia's "trimmed mean" from 2.1% to 1.7%. Investors inferred that a rate cut by the RBA had become more likely.

UK growth and US monetary policy

At 09:30 the Office for National Statistics announces its first stab at gross domestic product growth in the first quarter. The economy expanded by 0.6% in the fourth quarter of 2015 and analysts reckon the preliminary reading for Q116 will be a slightly slower at 0.4%. There is more than the usual uncertainty about today's figure because analysts find it difficult to factor in the dampening effect that the Brexit threat might have had on economic activity.

At 19:30 the US Federal Reserve releases its monetary policy statement. Although investors see a vanishingly small chance of any increase in the Funds Rate on this occasion, they assume that the statement will contain a hint at what might be to come later in the year. Some think the next upward move could come after the policy meeting on 14-15 June. If the statement were to squash that idea the dollar would come under pressure.