North American Summary and Highlights 14 Feb
Overview - The biggest move was a weaker GBP after UK CPI came in weaker than expected. The USD was marginally softer overall however in a correction from Tuesday’s sharp gains.
North American session
The USD lost a little ground against the EUR through a quiet North American session, with EUR/USD rising around 25 pips to 1.0730. Other pairs were steadier, although the USD was generally slightly softer. The exception was USD/CAD, which rose modestly to 1.3550. AUD/CAD advanced to test .88 as AUD/USD advanced to near .65.
There was no significant data, though Fed dove Goolsbee downplayed the importance of January’s strong CPI report which helped equites to see some recovery and UST yields to correct lower from Tuesday’s sharp post-CPI moves.
European morning session
GBP fell back through the European morning after weaker than expected UK January CPI data. The y/y rates for both headline and core were unchanged from December at 4.0% and 5.1% respectively, - both 0.1% below market expectations. EUR/GBP rose around 35 pips to 0.8530, reversing Tuesday’s decline, as UK yields fell around 10bps at the front end of the curve.
The USD was generally a little firmer through the morning, with EUR/IUSD falling around 10 pips to test below 1.07, and USD/JPY also up around 10 pips to 150.60. AUD/USD bucked the trend, edging up around 10 pips to 0.6575 as equities rallied helped by generally lower bond yields.
Other data included Eurozone industrial production, which rose a surprise 2.6% m/m in December, although much of this was due to an erratic looking 23.5% rise in Ireland. Norwegian mainland GDP rise 0.2% in Q4, slightly above expectations, while Eurozone employment was up 0.3% as expected in Q4. Eurozone Q4 GDP was confirmed as unchanged q/q in Q4.