North American Summary and Highlights 8 July
Overview - There was not much FX movement though EUR/JPY hit a 32-year high before correcting.
North American session
The USD saw some early slippage which was fully reversed in a largely news-free session. GBP/USD advanced to near 1.2850 before slipping back to near 1.2810 while USD/JPY slipped to 160.50 before settling in mid-range near 160.75. EUR/USD saw a modest dip to 1.0825 but EUR/JPY slipped back to near 174 after trading above 174.50 in Europe. EUR/CHF sustained its European rebound.
Markets are awaiting Powell’s testimonies to Congress due on Tuesday and Wednesday and US CPI on Thursday. The New York Fed’s survey of consumer expectations saw the 1-year view slip to 3.02% in June from 3.17% in May, while the 5-year view slipped to 2.83% from 3.00%. However the 3-year view increased to 2.93% from 2.76%.
European morning session
The EUR initially fell back in the European morning, mainly against the CHF, following the unexpected victory for the Left Alliance in the second round of the French parliamentary election. But the decline was short-lived, with equities also recovering from an initial dip, and the EUR finished higher on the session, with EUR/USD up around 20 pips to 1.0840 and EUR/CHF up 20 pips to 0.9710 after an initial dip to 0.9680. USD/JPY and consequently EUR/JPY were also higher on the session, with USD/JPY moving back above 161 and EUR/JPY reaching new 32 year highs at 174.64.
There wasn’t a great deal of other new. The German trade surplus was higher than expected at EUR24.9bn in May, while the Sentix investor confidence index fell back in July, breaking a run of 8 consecutive rises.