European Summary and Highlights 26 Jan
The EUR and particularly the CHF were firmer through the European morning session, bouncing after yesterday’s losses.
European morning session
The EUR and particularly the CHF were firmer through the European morning session, bouncing after yesterday’s losses. USD/CHF fell half a figure to 0.8632, while EUR/USD gained around 25 pips to 1.0865 after a brief dip early in the session. USD/JPY briefly trade dup above 148, but fell back to trade lower at 147.70 by the end of the morning. The USD was also general weaker against the commodity currencies.
News was quite limited. German Gfk consumer confidence dipped in February to its lowest for a year, but French confidence was steady. Eurozone M3 showed the first y/y rise since June at 0.1%, but this is still a very weak level, and household loan growth at 0.3% y/y was the weakest since 2015.
Asia session
Friday's Asia session so far is quiet with major FX pairs in limited range. The January Tokyo CPI has surprised to the down side as headline came in at 1.6% vs expectation of 2%, slumping from 2.4% in December. Less fresh food also dropped from 2.1% to 1.6% in January, so as less fresh food and energy to 3.1% from 3.5%. Despite base effect maybe a factor, it no doubts show a slower inflation picture and will allow the BoJ to be patient in exit loose monetary policy. USD/JPY took the cue to trade 0.09% higher at 147.78 with JGBs yields falling more than U.S. Treasury Yields.
Broad risk sentiment is soft on Friday and the USD is trading stronger against most peers. But the Aussie seems to have drawn support from news that the Ministry of Housing and Urban-Rural Development started an inaugural meeting of the Urban Real Estate Financing Coordination Mechanism, which also prompted up the property development equities in Hong Kong. The AUD/USD is trading 0.04% higher at 0.6587, NZD/USD is 0.05% lower at 0.6108 while USD/CAD slipped 0.05% despite oil 20 cents lower. Elsewhere, EUR/USD is 0.05% lower and GBP/USD is 0.03% lower.