North American Summary and Highlights 14 Nov
Overview -
The USD ended little changed, rising in Europe before a slide early in North America, which was subsequently largely corrected.
North American session
The USD saw some early weakness as equities opened under pressure, but as equities recovered returned to near neutral. USD/JPY returned to 154.50 after a dip to 153.80 while EUR/USD returned to 1.1620 after rising to 1.1650. EUR/CHF rebounded to .9220 as risk appetite recovered after slipping to .9180, even with the Swiss government announcing a reduction in US tariffs to 15%. EUR/GBP remained slightly softer near .8825.
Canada reported stronger than expected gains of 3.3% for September manufacturing shipments and 0.6% for September wholesale sales ex petroleum. USD/CAD found support around 1.4020 after slipping from 1.4040. AUD/USD near .6540 was up from a low below .6510. Fed talk saw Schmid and Logan Hawkish but Miran dovish, all consistent with their recent tone.
European morning session
Then USD was generally firmer through the European morning, gaining against almost all the major currencies, with only the CHF and GBP holding their own. The scandis saw the biggest losses, with EUR/SEK and EUR/NOK both up around 0.5%, while EUR/USD also fell around 0.2%. AUD/USD fell 0.25% while USD/JPY and USD/CAD were up 0.1%.
FX movements were mostly driven by generally weaker equity markets, following on from the sell-off in the US seen on Thursday. CHF strength led to a break in EUR/CHF below 0.92 to new post-2015 lows. GBP opened weak on the back of the overnight report that Chancellor Reeves had abandoned plans to raise income tax in the November 26 Budget, but after gilt yields spiked higher at the open EUR/GBP fell back to yesterday’s closing levels near 0.8830. Data was unremarkable, with most of the European numbers final data that was little revised from the preliminary data.