North American Summary and Highlights 14 August
Overview - The USD saw some losses on the day, but weak US consumer data had little lasting impact.
North American session
US retail sales were weaker than expected in July at -0.6%, -0.3% ex autos, with even ex auto and gasoline sales negative at -0.2%. This was followed by a weaker than expected preliminary August Michigan CSI of 51.0 from 55.4, with little change in inflation expectations. The USD response to the data was however modest, eventually moving above pre-data levels if still down on the day. Oil prices erased most of their earlier losses and UST yields picked up. Equities saw little change.
USD/JPY slipped below 159 on the retail sales dip before recovering to 159.40. EUR/USD saw a bounce to 1.1580 from 1.1560 largely reversed. EUR/GBP was little changed but EUR/CHF continued to advance, to .94. USD/CAD stabilized around 1.3880 while AUD/USD stabilized near .7080.
European session
Another summer-holiday morning though the dollar has leaked out moderately across the board. Some of this is Friday weekly-correction-driven in combination with technicals - USD/JPY for instance rolling back from 159 ½ ~ retracement level to trim back the 2-yen weekly gain.
Reuters sources echoed Jiji earlier in the week in suggesting focus on an earlier Sep hike (now majority priced in, in fact) and potential to pick up the pace. Bounce to date has also taken pair to less positive risk-reward zone, into 160+.
Cable also stays firm with the low-vol, risk-supportive mood, sitting off the recent highs and ahead of 1.36~ resistance. USD/CAD (along with risk-FX/dollar and commodity-FX/dollar in general) also extends the pullback, picking up a bit more on the slip below 1.39 with 1.38 below that – some of the backdrop to that discussed also (here) for instance.
EUR/USD finds 1.15~ as holding solid for support this week and lifts back to 1.1550 recent half point or so range highs. NZD further recovers as AUD/NZD rolls further back from the 1.21~ Aug to date resistance test Thursday.