North American Summary and Highlights 16 Jan

North American session
The USD strengthened through the US session, rising across the board but most notably against the JPY, supported by a general rise in US yields. USD/JPY gained around 60 pips to 147.20, but USD gains elsewhere were much more modest, with EUR/USD only losing around 10 pips, and AUD and GBP seeing similarly small declines. USD/CAD was net little changed on the session, after initially falling back 30 pips after stronger than expected Canadian CPI data, which showed larger than expected rises in all the core measures monitored by the BoC. 
US yield and USD gains came in spite of a much weaker than expected Empire manufacturing survey, which showed its lowest reading since the pandemic. Comments from Fed’s Waller, who said that easing would be cautious, supported the move.
European morning session
The USD made strong gains through the European morning session, helped by a rise in US yields. GBP and the JPY showed the most pronounced weakness, both losing around 0.4%. GBP/USD hit a low of 1.2626, while USD/JPY peaked at 146.75. but the USD was higher against all the G10 currencies. EUR/USD fell 40 pips to 1.0880, AUD/USD lost 20 pips to 0.66, and USD/CAD gained 20 pips to test 1.35. 
The main news was the UK labour market data, which showed a significant drop in y/y gains in the ONS November data to 6.5% y/y including bonuses, while the HMRC December data showed a m/m decline in wages. EUR/GBP rise modestly on the news, gaining round 10 pips to 0.8620, with the market consensus having expected only a slightly smaller decline. The employment data were more neutral, with the 3m/3m change in employment slightly higher than expected at 73k in November, and the unemployment rate falling to 4.2%. But the HMRC payrolled employment data for December showed a decline of 24k.