Aussie leads the way

103 not out

Data released this morning showed the Australian economy expanding by 0.3% in the first quarter of the year. Under the usual rules, which define recession as two consecutive quarters of negative growth, it means that in three months' time the country will be able to celebrate 26 recession-free years.

That is an impressive achievement, especially in light of the global financial crisis and subsequent plunge in the prices of Australia's big export earners, coal and iron ore. Investors were also impressed that the 0.3% figure exceeded the 0.2% that had been forecast by analysts. They marked up the Australian dollar, sending it a quick one cent higher for a net daily gain of a cent and a half. That 0.9% rise made it the day's top-performing major currency.

At the bottom of the pile the rand was hit by the opposite of the Aussie's success. South Africa's economy shrank by -0.7% in Q1 after contacting by -0.3% in the previous three months. That second quarter of negative growth signified recession and it knocked -0.7% off its value against the pound. 

Sterling hunkers down

With less than two days to go before the UK general election investors were inclined to give the pound a reasonably wide berth. The latest opinion polls give the Conservatives a lead of roughly six points over Labour but hey, everybody knows how reliable the opinion polls are. 

It was by no means a disastrous day for sterling: The pound was down by an average of just -0.2% against the other dozen most actively-traded currencies, equivalent to the quarter-cent it lost to the US dollar and the euro. It was unchanged against the Northern Scandinavian crowns. 

There were no UK economic data to affect the pound and, indeed, there were precious few from anywhere else. The Sentix index of euro zone consumer confidence improved by a point and retail sales went up by a nugatory 0.1% in April. Canada's Ivey purchasing managers' index was down by nearly nine points at 53.8 after seasonal adjustment but the Loonie was unmoved. The Kiwi was not helped by -0.3% quarterly fall in manufacturing sales but it still managed to gain three quarters of a cent on the day.

House prices

The last two pre-election UK ecostats appear today; the Halifax house price index at half past nine and the RICS house price balance at midnight. Both are expected to indicate falling prices: neither ought to affect sterling.

Factory orders data are due this morning from Germany and Sweden, as are Italian retail sales. Canadian building permits come out after lunch. A raft of Japanese figures tonight cover first quarter growth, international investment flows and the balance of trade. There will be trade figures from Australia and China too.

None of those will matter to sterling which, at the moment, is only as good as the last opinion poll. There will be more of those today. If only they were reliable…