North American Summary and Highlights 3 Jan

North American session
The USD gained across the board through the North American session, with USD/JPY making the most pronounced move, rising around 90 pips to a high of 143.73, before correcting to around 143.25 after the FOMC minutes. Other currencies declined more modestly. EUR/USD saw a brief move below 1.09, and AUD and CAD also lost 0.2% or less, while GBP/USD actually rose slightly, gaining 40 pips to 1.2665. The CHF also rose, with USD/CHF dropping from 0.8540 to 0.8505. 
The USD remained firm in the immediate aftermath of the FOMC minutes, which showed caution towards the possibility of easing, though with the minutes also seeing progress on inflation the USD did eventually move lower, as gains UST yields were erased. The tone of the minutes consistent with earlier comments from the Fed’s Barkin, which were seen as mildly hawkish, helping the USD gains early in the session, although in practice we saw them as essentially in line with the more dovish tilt seen at the last FOMC.
Datawise, December’s ISM manufacturing index at 47.4 from 46.7 and November JOLTS job openings at 8.79m from 8.852m were not far from consensus, the latter down only because October was revised up from 8.733m. Three of the five components that make up the ISM composite increased, production to 50.3 from 48.5 and employment at 48.1 from 45.8, both picking up from weaker November data. Deliveries also increased to 47.0 from 46.2. New orders however slipped to 47.1 from a firmer November reading of 48.3 while inventories at 44.3 slipped from November’s 44.8. Prices paid are not a contributor to the composite, but at 45.2 from 49.9 reversed a November bounce.

European morning session
The USD was generally firmer through the European morning, rising across the board, with gains against the riskier currencies catching up with initial USD/JPY strength. 
News was relatively thin on the ground, with German unemployment the only significant data. This rose slightly less than expected at 5k on the month in December, but EUR/USD fell back soon after the data was released, losing around 30 pips in the second half of the morning after opening steady near 1.0955. USD/JPY had firmed up earlier in the session, and rose around half a figure through the morning from 142.10. There were similar declines in AUD/USD, which fell back from 0.6765 to 0.6740. GBP was more resilient, with GBP/USD only falling modestly and EUR/GBP slipping back around 20 pips to 0.8650.