North American Summary and Highlights 26 November
Overview - The USD slipped into early North America from stronger levels seen in Asia on tariff concerns, but picked up subsequently ahead of FOMC minutes that were not seen as hawkish.
North American sessions
The USD saw early losses, USD/JPY falling to 153, EUR/USD rising above 1.05, GBP/USD above 1.26 and AUD/USD above .65, but with equities generally proving resilient to tariff concerns, the USD recovered. AUD/USD fell to .6460 but USD/JPY was able to sustain only a partial recovery from the lows. EUR/USD and GBP/USD returned to near European opening levels around 1.0475 and 1.2550 respectively. USD/CAD remained firm, but slipped back below 1.41.
US data saw little response. November consumer confidence saw only a modest response to the election, rising to 111.7 from 109.6, but October new home sales plunged by 17.3% to 610k, the fall led by the hurricane-impacted South. Front end UST yields slipped after FOMC minutes saw little change to upside inflationary risks despite downside risks to employment having been seen as reduced. This helped the USD stabilize after having been recovering into the release.
European morning session
The USD was generally weaker through the European morning after making gains overnight on the Trump announcement of tariffs on Canada, Mexico and China. EUR/USD gained around 40 pips to 1.0520, while USD/JPY lost around 30 pips to 153.75. The EUR also gained ground on most European crosses, with EUR/CHF up around 15 pips, EUR/GBP around 10 pips, and EUR/NOK around 5 figures. EUR/SEK bucked the trend, dropping a figure to 11.53. The CAD and MXN, which had been the main victims of the USD gains after the Trump announcement, also made modest gains, but remained substantially below the pre-announcement levels, while the other majors were essentially back to pre-announcement levels.
There was little news of any note during the morning.