Europe Summary and Highlights 20 December

European morning session

The USD edged slightly lower through the European morning in fairly quiet trade. EUR/USD gained around 15 pips to 1.0390, while USD/JPY slipped 25 pips to 156.75. The CHF was the best performer, with EUR/CHF falling back below 0.93 and USD/CHF losing around 25 pips to 0.8945, helped by generally weaker equity markets.

GBP underperformed, following slightly weaker than expected retail sales data, which showed a 0.2% m/m rise in November. EUR/GBP edged up to 0.8305 and GBP/USD was steady at 1.25. SEK lost some of Thursday’s gains, with EUR/SEK gaining 3 figures to 11.47.

Asia session

On Friday, we started the day with some verbal intervention from Japan finance minister Kato. The jawboning came with nothing new but is enough to curb the latest rally in USD/JPY. Moreover, the Japan November National headline CPI came in stronger than prior month at +2.9%, ex fresh food and ex fresh food & energy also edged higher. While this should be very supportive for the JPY, the lack of commitment in the BoJ December statement limited its impact. USD/JPY is trading 0.2% lower at 157.1 with both the U.S. Treasury and JGB yields lower.

While regional sentiment is still holding on, U.S. three major equity indexes are all in the red and are dragging sentiment. With USD continue to exert its strength, major currencies except the JPY are suffering. AUD/USD is down 0.23% to 0.6224, NZD/USD also down 0.13% to 0.5623 while USD/CAD rose 0.19% as oil slips 30 cents. Else, EUR/USD is up 0.02% and GBP/USD is down 0.16%.