North American Summary and Highlights 19 Nov
Overview - JPY weakness was the focus in the European morning but the USD rallied across the board in North America, mostly ahead of FOMC minutes that helped sustain the USD gains.
North American session
The USD was stronger across the board as traders awaited Thursday’s September non-farm payroll and FOMC minutes from October 29 released in the afternoon, which bought a modest reaction but the USD strength persisted. The minutes showed strongly differing views on whether easing would be appropriate in December and some debate over the decision to ease in October. Earlier the Labor Dep‘t announced that November’s non-farm payroll, originally scheduled for December 5, would be released on December 16, including a partial October report, with a non-farm payroll but not an unemployment rate. This report will therefore be too late for the December 10 FOMC meeting.
USD/JPY gains extended to reach 157 while EUR/USD fell to around 1.1525. EUR/JPY tested 181, EUR/GBP was slightly firmer near .8830 while EUR/CHF remained firm near .9290. USD/CAD rallied from near 1.40 to near 1.4060 while AUD/USD fell to .6570 from .6490.
European morning session
JPY weakness was the main feature of the European morning. USD/JPY rose 65 pips to 156.15, its highest since January, after Finance minister Katayama failed to protest JPY weakness at her press conference following her meeting with BoJ governor Ueda. The CHF kept pace with JPY weakness, with EUR/CHF gaining 20 pips to 0.9290, as the USD also made modest gains across the board, with EUR/USD losing 15 pips to 1.1570
GBP also fell back, with EUR/GBP gaining 10 pips to 0.8825 helped by marginally softer than expected UK October CPI data. Although y/y CPI rates are as expected, the core m/m gain of 0.3% was slightly below the 0.4% consensus, and services inflation was weaker than expected at 4.5% y/y.