North American Summary and Highlights 15 Feb

North American session

The USD fell back through the North American session following weaker than expected retail sales data. A brief USD recovery in mid-session faded in the afternoon. Retail sales fell 0.8% headline, 0.6% ex autos, and while some of the weakness may have been due to weather, it was enough to pit the USD on the back foot, mainly against the riskier currencies. USD/CAD saw the biggest move, falling over half a figure to 1.3470, while EUR/USD moved up around 35 pips to 1.0770. GBP/USD more than reversed earlier losses, testing 1.26. USD/JPY initially dipped, but finished not much changed. 

Other US data released with retail sales, the Philly Fed survey, NY Empire state survey and jobless claims data were stronger than expected and moderated the impact of retail sales. Later industrial production with a 0.1% decline, with manufacturing down by 0.5%, was weaker than expected with bad weather cited, but the NAHB homebuilders’ index extended its recent recovery above expectations.

European morning session

GBP fell back through the European morning after weaker than expected UK GDP data. While the December decline of 0.1% was smaller than expected, revisions mean a 0.3% decline in Q4 – a larger decline than expected and confirming the H2 2023 recession. EUR/GBP gained around 20 pips to 0.8555. The December trade balances for the UK and the Eurozone were released, with the UK showing a slightly smaller than expected GBP14bn deficit and the Eurozone a smaller than expected 16.8bn surplus. 

Otherwise, things were generally quiet with the USD around 0.1% softer across the board. Eurozone Q4 GDP was confirmed as unchanged q/q in Q4.