North American Summary and Highlights 24 Oct
Overview - The USD fell on a weaker than expected US CPI, but erased most of its losses in subsequent trade.
North American session
US September CPI was weaker than expected, gains of 0.3% overall and 0.2% ex food and energy both 0.1% below the consensus. The USD saw an instant dip, EUR/USD rising to near 1.1650 from 1.1615 and USD//JPY falling to 152.30 from 152.95. The USD dip was however largely reversed, stronger October S and P PMI indices of 52.2 from 52.0 for manufacturing and 55.2 from 54.2 for services providing support. The final October Michigan CSI was revised down to 53.6 from 55.0, but the 5-10 year inflation view was revised up to 3.9% from 3.7%.
EUR/USD corrected to around 1.1630 but remained above pre-data levels. EUR/GBP at .8740 from .8720 was also stronger as GBP/USD returned to pre-data levels near 1.33. EUR/CHF also saw modest gains to .9250. USD/JPY saw a bounce that briefly cleared 153 and settled near pre-data levels. The USD also fully reversed its initial losses versus AUD and CAD, though with equites stronger AUD/USD at .6510 ended slightly above pre-data levels near .65 and USD/CAD at 1.40 ended below pre-data levels near 1.4030. Ontario Premier Ford announced a pause starting Monday on an advert that prompted Trump to exit US-Canada trade talks.
European morning session
The USD was generally not much changed through the European morning, but EUR/USD did manage gains of around 15 pips helped by stronger than expected preliminary October PMI data. Eurozone composite PMI rose to 52.2, its highest since May 2023, driven primarily by a sharp rise in the German services PMI to 54.5. French services PMI fell, so while the Eurozone composite index was stronger, there was some concern about the divergence within the region.
EUR/GBP was slightly higher through the morning, but off its best levels after the UK PMI also rose in October, albeit less sharply than the Eurozone index. Also, the UK retail sales data for September was stronger than expected at 0.5% m/m, and showed a strong broad based gain in Q3.
The USD was slightly firmer against the commodity currencies, gaining 0.1% or more against the AUD, NOK and CAD.