North American Summary and Highlights 15 August
Overview - After a quiet European morning the USD bounced on stronger retail sales and initial claims data, though with equities strong the riskier currencies saw some recovery from their initial losses.
North American session
The USD bounced sharply on stronger than expected US July retail sales data which saw a 1.0% gain overall, with 0.4% gains ex autos and ex autos and gasoline, as well as a lower than expected weekly initial claims outcome of 227k from 234k, easing fears of a slowing in the US economy.
USD/JPY bounced to a high of 149.32 from 147.25 and saw no significant correction, settling near 149. The riskier currencies however fully reversed their initial dips before seeing modest late slippage, GBP/USD rebounding from a low of 1.28 back above 1.2850. Late USD/CAD gains saw it back near its post-data high of 1.3738 from pre-data levels around 1.37. EUR/USD slipped to a low of 1.0950 from above 1.01, before ending in mid-range near 1.0975, the EUR slipping versus the GBP but stronger versus the CHF.
Other US data was quite soft, but had little impact. Moderately negative manufacturing surveys from the Philly Fed and Empire State accompanied the retail sales and initial claims releases, followed by a 0.6% fall in July industrial production, though this was fully due to a sharp dip in autos and temporary weakness due to Hurricane Beryl. August’s NAHB homebuilders’ index slipped to 39 from 42, but 6-month expectations were firmer. Fed’s Musalem denied the Fed was behind the curve, stating data did not suggest recession.
European morning session
Subdued summer trading was seen in Europe, with not much movement in spot rates ahead of the U.S. retail sales data. NOK did see a small rally after the Norges bank kept policy unchanged and noted concerns about the weak NOK.