Europe Summary and Highlights 27 October
The USD was generally softer through the European morning, with EUR/USD gaining 15 pips to 1.1640, and USD/JPY down 25 pips to 152.75.
European morning session
The USD was generally softer through the European morning, with EUR/USD gaining 15 pips to 1.1640, and USD/JPY down 25 pips to 152.75. AUD was marginally the best performer, with AUD/USD up 15 pips to 0.6555. GBP kept pace with the EUR but CHF, scandis and CAD were all little changed against the USD.
The session saw the German IFO survey, which was slightly on the strong side of the published consensus, although the real market expectation might have been adjusted higher after last week’s stronger than expected German PMI. There was little initial reaction to the IFO, or the Eurozone M3 data released at the same time, which was broadly in line with consensus but showed some weakness in lending to the non-bank private sector.
Asia session
The broad risk atmosphere is upbeat to start the week as we hear headlines suggesting a potential de-escalation between U.S.-China. It is widely expected as we do not see a thorough break down in U.S.-China trading. Market sentiment is cheerful with major equity indexes opening higher and Nikkei leading with 2% gains. AUD/USD is trading 0.27% higher at 0.6531, retracing partial opening gains at 0.6538. NZD/USD also opened higher at 0.5777 but has retraced partial gains to 0.5757 while USD/CAD closed the opening gap and is trading 0.05% lower.
The Japan cabinet secretary Kihara starts verbal intervening and says it is important that currencies move in stable manner, reflect fundamentals. While it is not the first time a Japanese official to verbally intervene, the new Japanese cabinet is likely viewed as more dovish and it just seems more like a symbolic move for the government to do than actually looking for strong JPY. USD/JPY is thus trading 0.24% higher at 153.23. Else, EUR/USD is down 0.05% with gap closed and GBP/USD is still up 0.03%.