North American Summary and Highlights 19 July
Overview - It was a quiet day for FX though GBP and CAD both saw some losses after weak retail sales data.
North American session
Global IT outages and a lack of US data helped ensure there was little FX movement in North America, USD/JPY trading near 157.50 and EUR/USD near 1.0880. USD/CAD saw a rise to near 1.3750 after a weak Canadian retail sales report for May, down by 0.8% and by 1.3% ex autos, but even that move was partially corrected. Equities were softer and UST yields slightly higher, and the USD marginally stronger overall.
European morning session
The USD gained modest ground in Europe, especially against JPY and GBP. Some noted the large scale global IT outages added to the profit taking move in tech shares, but traders were also talking about the likely pro U.S. inflation impact of Trump top 3 priorities in Thursday speech – reducing immigration; tax cuts and protectionism.
The focus is now on the U.S. equity market, though some note that rotation from tech to small caps ahead of a Fed rate cut is also happening and this may not be USD positive – if the FOMC meeting July 31 is dovish.
Elsewhere, GBP lost ground across the board as weaker than expected June retail sales pushed expectations of an August cut to 50%.