North American Summary and Highlights 16 December
Overview - The USD made gains in Europe and early North America but subsequently slipped back.
North American session
The USD saw early strength but this faded later in the session, EUR/USD bottoming at 1.0475 before moving back above 1.05. USD/JPY peaked near 154.50 but held above 154. GBP/USD was relatively strong, peaking near 1.27 with only a modest correction, seeing EUR/GBP weaker below .8290, though EUR/CHF was stronger near .84. Germany’s government lost a confidence vote, paving the way for an early election.
US data was mixed with December’s Empire State manufacturing index slipping to 0.2 from 31.2 and the S and P manufacturing PMI falling to 48.3 from 49.7, but the services PMI was very strong at 58.5 from 46.1. The USD peaked shortly after the S and P data. Canadian Finance Minister Freeland resigned, preferring to avoid fiscal stimulus awaiting the US tariff threat, USD/CAD saw early gains to 1.4271 and ended still weaker near 1.4250.
European morning session
The USD was generally firmer through the European morning. EUR/USD initially edged a little higher after Eurozone PMI data came in on the strong side of expectations, reaching a high of 1.0525 after opening near 1.0510, but subsequently fell back to 1.0490. USD/JPY moved up from 153.60 to 153.80. AUD/USD also fell back, from 0.6370 to 0.6350. GBP outperformed, with EUR/GBP falling back below 0.83 after rising above it on Friday following the weaker than expected GDP data, and GBP/USD was slightly higher on the morning, rising from 1.2630 to 1.2650.
The PMI data was mixed with the manufacturing indices for both the Eurozone and the UK falling on the month, but services indices rising. The composite Eurozone index rose more than a point in December, but remained below the October level, while the UK composite index was unchanged in December, still well below the October level.