North American Summary and Highlights 17 Dec
Overview - GBP slipped on a softer than expected UK CPI. GBP/USD later reversed its losses but EUR/GBP remained firmer.
North American session
GBP/USD reversed European losses returning to pre-CPI levels around 1.3375. EUR/GBP saw only a modest correction from its highs, to .8780, as EUR/USD rose to 1.1745 from 1.1710. USD/JPY saw only marginal gains to above 155.50 but AUD/USD slipped to near .66 from .6625 as equities came under pressure. USD/CAD gains failed to breach 1.38. There was limited news. Fed’s Waller was dovish but not aggressively so.
European morning session
GBP fell back through the European morning after much weaker than expected UK November CPI data which showed CPI inflation falling to 3.2% y/y on both a headline and a core basis. EUR/GBP gained 40 pips to 0.8795.
The USD was little changed except against GBP. EUR/USD gained around 15 pips to 1.1725 but the USD was otherwise generally not much changed. EUR/SEK was slightly firmer. The German IFO survey was slightly weaker than expected with the business climate index falling to 87.6 from 88.0, but some weakness may have been expected after the softer PMI released on Tuesday. The labour cost index was also a little weaker than expected at 3.3% y/y. The firmer EUR may have been related to EUR/GBP flows rather than any EUR specific news, as the data was on the soft side.