North American Summary and Highlights 7 Aug
Overview - GBP bounced after a narrower than expected BoE vote for easing. Elsewhere moves were modest.
North American session
The USD was slightly firmer through most of the session before a late dip as Trump nominated Council of Economic Advisers Chair Stephen Miran to fill a Fed vacancy through January 2026. The USD saw marginal gains against the commodity currencies. USD/JPY was slightly weaker at 147.15 and EUR/USD little changed near 1.1650. GBP sustained its post-BoE gains, GBP/USD at 1.3430 and EUR/GBP at .8670.
US data had little impact. Initial claims rose to 226k from 219k while Q2 saw a solid 2.4% rise in non-farm productivity with a moderate 1.6% rise in unit labor costs. Fed’s Bostic expressed caution over inflation risks while Bloomberg reported that Governor Christopher Waller was now favorite to be the next Fed Chairman.
European morning session
A sharp bounce in the GBP after the BoE decision was the main story in Europe. A 25bps easing as delivered as expected but the surprise was in the vote, only a marginal majority with five voting for an ease and four favoring keeping rates unchanged. GBP/USD rose to 1.3430 from 1.3375, while EUR/GBP fell to .8680 from .8725. Ahead of the BoE decision the USD saw some early weakness that was subsequently largely reversed with USD/JPY little changed near 147.35 after rebounding from a dip below 147. EUR/USD gains stalled at 1.17 with a dip back to near 1.1650 assisted by the BoE.