North American Summary and Highlights 13 Dec

North American session
The USD fell back after weaker than expected PPI, reversing the gains seen after the CPI on Tuesday. PPI core was flat m/m against a 0.2% rise expected. The JPY and the AUD, which had lost the most on Tuesday, gained the most on the PPI data. 
The FOMC delivered more dovish dots, seeing 75bps of easing in 2024, and fine tined the statement in a more dovish direction in its views on the economy and likelihood of future tightening. This saw the USD fall sharply, a more that extended through Chairman Jerome Powell’s press conference, the market focusing particularly on his comment that when to ease was coming into view. EUR/USD rose from below 1.08 to near 1.09, and USD/JPY fell from near 145 to see lows below 143. GBP/USD rallied a big figure above 1.26. AUD/USD also rallied a big figure, outperforming the CAD as AUD/CAD reached .90.

European morning session
GBP fell back through a generally quiet European morning in response to the weaker than expected UK October GDP data. EUR/GBP traded around 20 pips higher to 0.8610, while GBP/USD lost nearly half a figure, reaching a low of 1.2510. EUR/USD was also marginally lower at 1.0775, while USD/JPY reversed early gains to be unchanged at the end of the morning around 1.4570. EUR/NOK extended yesterday’s gains, reaching 11.87 before dropping back. 
The UK October GDP data showed a 0.3% m/m decline, with declines in services, industrial production and construction, against market expectations of a flat m/m number. This triggered a decline of around 5bps in UK 2 year yields and the consequent decline in GBP.