European Summary and Highlights 21 Mar
The CHF was then big mover through the European morning, with EUR/CHF rising a big figure when the SNB decided to cut their policy rate to 1.5% from 1.75%.
European morning session
The CHF was then big mover through the European morning, with EUR/CHF rising a big figure when the SNB decided to cut their policy rate to 1.5% from 1.75%. This had been priced as around a 40% chance by the market, although surveys indicated only around 25% of forecasters were looking for a cut.
Otherwise, we had European PMIs, with Eurozone showing a slightly larger than expected rise in the composite index, due to strength in services, while manufacturing disappointed. The UK PMI split was reversed, with stronger manufacturing and weaker services and composite, but the net FX impact was small, with initial GBP gains reversed by the end of the morning.
EUR/NOK finished the morning little changed after Norges Bank left rate unchanged as expected. There was a small NOK gain immediately after the announcement, as Norges Bank maintained their stance that rate cuts aren’t likely until the autumn, and only marginally reduced their projected policy rate into 2025.
The USD was net slightly stronger through the morning, with EUR/USD dropping around 15 pips and USD/JPY edging around 10 pips higher.
Asia session
After two dismal jobs reports, the February Australian employment data has shown a great rebound. Headline employment change is an increase of 116.5k, unemployment rate dropped to 3.7% while participation rate also slipped by 0.1%. With full time unemployment taking a big chunk of headline changes, it is a great job report and is supporting the Aussie. AUD/USD is trading 0.54% higher at 0.6622, NZD/USD is 0.23% higher at 0.6095 while USD/CAD is 0.19% lower as oil retrace some of the overnight losses.
The USD slumped as the FOMC dots plot did not signal less easing in 2024. Ueda's remark does not provide any clarity in the future path of BoJ and we do have some verbal intervention from Japanese cabinet officials but I doubt they have swayed the course in USD/JPY.With USD broadly weaker, USD/JPY corrected from highs to trade 0.32% lower at 150.76 with a session low at 150.27. Elsewhere, EUR/USD is 0.12% higher and GBP/USD is 0.03% higher.