Europe Summary and Highlights 3 October

European morning session

GBP saw the biggest move in the European morning, with EUR/GBP gaining 80 pips to 0.8410 after an interview with BoE governor Bailey in the Guardian newspaper. Bailey said there was a chance that the BoE could become "a bit more activist" and "a bit more aggressive" in its approach to lowering rates, if inflation news continued to be good. The JPY continued to weaken through the morning, following similar declines in the previous few session as Japanese officials represented a dovish policy stance. USD/JPY gained another 40 pips to 146.90. The CHF also weakened as Swiss September CPI data came in softer than expected at -0.3% m/m, 0.8% y/y. EUR/CHF finished the session 30 pips higher at 0.9400, having reached a high of 0.9422 mid-session.

EUR/USD made modest gains, rising around 10 pips to 1.1035 helped by an upward revision in the Eurozone services and composite PMI, and stronger than expected PPI, which rose 0.6% in August. UK PMI was revised slightly lower.

North American session

US ADP employment data with a rise of 143k exceeded expectations, and lifted USD/JPY above 145. USD/JPY continued to steadily advance, moving well above 146 in the afternoon. USD gains elsewhere were relatively modest. EUR/USD slipped to 1.1040 from 1.1075. The EUR was marginally firmer against the CHF and marginally weaker against the GBP. AUD/USD saw only marginal losses but found sellers at .69. USD/CAD saw little response to the data, but moved above 1.35 in the afternoon as oil corrected lower.