North American Summary and Highlights 5 September

North American session

The USD slipped on a weaker than expected 99k rise in August’s ADP employment report, EUR/USD reaching a high of 1.1120 and USD/JPY reaching a low of 142.85 though shortly after a fall in initial claims to 227k from 232k gave the USD some support. After the August ISM services index edged up to 51.5 from 51.4 the USD gained some momentum, EUR/USD falling to a low of 1.1075 and USD/JPY rising to a high of 144.23, though the bounce subsequently faded and the USD ended little changed, EUR/USD near 1.11 and USD/JPY near 143.40.

Moves elsewhere were marginal though GBP. AUD and CAD managed marginal gains in the afternoon as equities came off lows and UST yields slipped. US data also saw a downward revision to Q2 unit labor costs, to 0.4% annualized frim 0.9%, released alongside initial claims.

European morning session

The JPY remained the focus in European FX market, with European trading seeing a small JPY pullback after the rapid gains over the past few sessions, USD/JPY finding support above 143, with the market waiting fur more US labor market signals after weak U.S. JOLTS data fueled Fed rate talk. Japan real wage numbers were higher than expected and added to BOJ hike talk – though a 10bps hike is only fully discounted January 2025. 

Other majors have been left behind somewhat, with little movement in Europe ahead of the U.S. data deluge, though EUR/USD nudged above 1.11.  A subtle divergence remains this week between commodity currencies and EUR/GBP/CHF/Scandis.  Traders say commodity currencies have failed to benefit from weak USD data, as it has been more than counterbalanced by lower oil prices (higher OPEC+ production fears) and weak base metals (China gloom spreading further).