The Washington impasse may lead to further Euro strength

In an epic reversal of fortunes, the Eurozone is starting to look like a safe haven to some.

It’s been a pretty quiet year in the major currency markets. Euro vs the USD is the most actively traded currency pair in the 5 trillion USD a day market, and this year its range has been pretty muted, with a high on 1 February of 1.3711 and a low of 1.2746 on 4 April. As I write, on 21 October, the current price is 1.3680, so only a hair’s breadth away from the year’s highs.

The USD was already suffering as a result of the Fed’s "no-taper" shocker in September and we know what China felt about Washington’s stand-off and brinkmanship with the debt ceiling; last week saw China’s ex-deputy head of FX regulation opining that China should cut its holdings of US Treasuries in the medium to long term and the ECB’s Nowotny chipping in to say that the Euro will play an increasing role as a reserve currency.

The dollar’s trouble is that it now seems highly unlikely that the Fed will stop printing money in the near future. The messy denouement of the Washington show means that we will now be subject to another four or maybe even six months of rather unsettling uncertainty.

Although Congress has extended to debt limit to 7 February, the US Treasury could then start to use "extraordinary" accounting measures to live from hand-to-mouth for a few more weeks, as it started doing this year in May, finding some USD 300bn tucked away to prolong the real debt limit deadline to 17 October (ish). The seasonal shape of US Treasury receipts and payments suggests it will only take a couple of months or so to use up USD 300bn this time, only getting them through to April.

This is neither "nowt nor summat", as we say in Yorkshire. It’s not a short enough time for consumers, corporations and the Fed to feel this is all going to be behind us soon, and it’s not far enough away for everyone to think "whatever, I’ll forget about Washington for a year", say. It’s just about the worst timescale one can imagine.

Consumers will put off purchases, employers will hesitate to hire - in both cases probably not catastrophically, but enough to take the edge off growth - 0.5 per cent in Q4 2013 and Q1 2014. More importantly for the dollar’s fortunes the Fed now seems highly unlikely to taper before its March meeting, and there must even be some doubt over that now.

The Fed’s key data points are going to be unreliable. We’re now going to see September’s employment report on 22 October, but the market’s reaction function will be heavily skewed: if the numbers are weak, then they’ll be taken to presage an economic dip, if they’re strong they’ll be discounted as dating from before Washington’s antics. The next employment report, for October, will now come out on 8 November and the "household survey" used to calculate the unemployment rate will have to conducted retrospectively - so that will be tainted, and also subject to the same interpretation bias. This all means it’ll be January before the Fed might feel it has "clean" jobs data to analyse.

In an epic reversal of fortunes, the shutdown/debt ceiling debate has given even the Euro some semblance of safe-haven status and thrown into stark relief the contrast between the philosophies of the Fed and the ECB.

With the OMT still doing its job as a virtual sticking plaster, and a Grand Coalition in the making in Germany, there seems little reason why EUR/USD can’t climb towards 1.40 or above before Christmas. That in turn will make the ECB very uneasy, as the Eurozone is flirting with deflation, so a rate cut and/or another LTRO seems very likely-probably at the December meeting.

US Federal Reserve Chairman Ben Bernanke reads the FT during the annual World Bank - IMF meetings in Washington, DC. Photograph: Jim Watson/Getty Images.

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

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The Tinder dating app isn't just about sex – it's about friendship, too. And sex

The lines between sex, love and friendship are blurrier than ever, as I found out quickly while using the app.

The first time I met someone using Tinder, the free dating app that requires users to swipe left for “no” and right for “yes” before enabling new “matches” to chat, it was an unqualified success. I should probably qualify that. I was newly single after five years in a committed relationship and wasn’t looking for anything more than fun, friendship and, well, who knows. A few weeks earlier I had tried to give my number to a girl in a cinema café in Brixton. I wrote it on a postcard I’d been using as a bookmark. She said she had a boyfriend, but wanted to keep the postcard. I had no date and I lost my page.

My Tinder date was a master’s student from Valencia called Anna (her name wasn’t really Anna, of course, I’m not a sociopath). When I arrived at the appointed meeting place, she told me I was far more handsome IRL (“in real life”) than my pictures suggested. I was flattered and full of praise for the directness of continental Europeans but also thought sadly to myself: “If only the same could be said about you.”

Anna and I became friends, at least for a while. The date wasn’t a success in the traditional sense of leading us into a contract based on exclusivity, an accumulating cache of resentments and a mortgage, but it had put me back in the game (an appropriate metaphor – people speak regularly of “playing” with the app).

According to Sean Rad, the co-founder who launched Tinder in late 2012, the service was invented for people like me. “It was really a way to overcome my own problems,” he told the editor of Cosmopolitan at an event in London last month. “It was weird to me, to start a conversation [with a stranger]. Once I had an introduction I was fine, but it’s that first step. It’s difficult for a lot of people.” After just one outing, I’d learned two fundamental lessons about the world of online dating: pretty much everyone has at least one decent picture of themselves, and meeting women using a so-called hook-up app is seldom straightforwardly about sex.

Although sometimes it is. My second Tinder date took place in Vienna. I met Louisa (ditto, name) outside some notable church or other one evening while visiting on holiday (Tinder tourism being, in my view, a far more compelling way to get to know a place than a cumbersome Lonely Planet guide). We drank cocktails by the Danube and rambled across the city before making the romantic decision to stay awake all night, as she had to leave early the next day to go hiking with friends. It was just like the Richard Linklater movie Before Sunrise – something I said out loud more than a few times as the Aperol Spritzes took their toll.

When we met up in London a few months later, Louisa and I decided to skip the second part of Linklater’s beautiful triptych and fast-track our relationship straight to the third, Before Midnight, which takes place 18 years after the protagonists’ first meet in Vienna, and have begun to discover that they hate each others’ guts.

Which is one of the many hazards of the swiping life: unlike with older, web-based platforms such as Match.com or OkCupid, which require a substantial written profile, Tinder users know relatively little about their prospective mates. All that’s necessary is a Facebook account and a single photograph. University, occupation, a short bio and mutual Facebook “likes” are optional (my bio is made up entirely of emojis: the pizza slice, the dancing lady, the stack of books).

Worse still, you will see people you know on Tinder – that includes colleagues, neighbours and exes – and they will see you. Far more people swipe out of boredom or curiosity than are ever likely to want to meet up, in part because swiping is so brain-corrosively addictive.

While the company is cagey about its user data, we know that Tinder has been downloaded over 100 million times and has produced upwards of 11 billion matches – though the number of people who have made contact will be far lower. It may sound like a lot but the Tinder user-base remains stuck at around the 50 million mark: a self-selecting coterie of mainly urban, reasonably affluent, generally white men and women, mostly aged between 18 and 34.

A new generation of apps – such as Hey! Vina and Skout – is seeking to capitalise on Tinder’s reputation as a portal for sleaze, a charge Sean Rad was keen to deny at the London event. Tinder is working on a new iteration, Tinder Social, for groups of friends who want to hang out with other groups on a night out, rather than dating. This makes sense for a relatively fresh business determined to keep on growing: more people are in relationships than out of them, after all.

After two years of using Tinder, off and on, last weekend I deleted the app. I had been visiting a friend in Sweden, and took it pretty badly when a Tinder date invited me to a terrible nightclub, only to take a few looks at me and bolt without even bothering to fabricate an excuse. But on the plane back to London the next day, a strange thing happened. Before takeoff, the woman sitting beside me started crying. I assumed something bad had happened but she explained that she was terrified of flying. Almost as terrified, it turned out, as I am. We wound up holding hands through a horrific patch of mid-air turbulence, exchanged anecdotes to distract ourselves and even, when we were safely in sight of the ground, a kiss.

She’s in my phone, but as a contact on Facebook rather than an avatar on a dating app. I’ll probably never see her again but who knows. People connect in strange new ways all the time. The lines between sex, love and friendship are blurrier than ever, but you can be sure that if you look closely at the lines, you’ll almost certainly notice the pixels.

Philip Maughan is Assistant Editor at the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad