North American Summary and Highlights 16 September
Overview - The USD was under some pressure in Europe but stabilized in North America with support from the Empire State survey, seeing some gains versus JPY and CAD.
North American session
The USD showed some gains versus the JPY and CAD but little change elsewhere. USD/JPY bounced back above 140 on an unexpected positive September Empire State manufacturing index of 11.5 versus -4.7 in August, though gains peaked just below 141. USD/CAD briefly traded above 1.36 assisted by reports BoC Governor Macklem was open to more aggressive easing. EUR/USD remained stable near 1.1125.
European morning session
The USD fell back against the riskier currencies in the European morning, but finished unchanged against the JPY slightly above 140 after making new lows for the year at 139.58 earlier in the session. EUR/USD advanced around 20 pips to 1.1120, and AUD/USD gained 15 pips to 0.6740. GBP and scandis kept pace with the EUR, while EUR/CHF edged up slightly to trade above 0.94 and USD/CAD was net little changed.
There was little news of significance, but the Eurozone wage data was of interest, showing a decline in wage growth to 4.5% y/y in Q2 from 5.2% in Q1. Interest rate markets now price a 50bp Fed cut as more likely than a 25bp cut this week, underpinning the soft USD tone.