North American Summary and Highlights 1 Oct
Overview - The USD was little changed, despite government shutdown concerns and weak ADP employment data.
North American session
The USD slipped on a weak ADP employment report which fell by 32k in September with August revised to a 3k decline from a 54k increase, but ended little changed. September’s ISM manufacturing index at 49.1 from 48.7 was not significantly above expectations, but the USD correction started after the release.
USD/JPY returned to around 147.10 after a dip below 147 while EUR/USD returned to 1.1735 after bouncing to near 1.1770 on the ADP data. EUR/GBP was stable near .87 after European losses but EUR/CHF corrected to .9350 after rising to .9370. Well after the US data AUD/USD dipped to near .66 and USD/CAD rose above 1.3950 but these moves were not sustained with equities building gains.
European morning session
Then JPY gained ground on the crosses through the European morning, with the USD lower against the JPY but higher against the EUR and mixed against the other riskier currencies. GBP, NOK and AUD made marginal gains against the USD, while the CAD and CHF were both modestly lower. USD/JPY lost around 30 pips to 147.20, hitting a low just below 147, while EUR/USD gave up initial gains to finish 20 pips lower at 1.1735.
The market movement looked to be mostly related to the US government shutdown, with little news of note in the morning. Final European manufacturing PMIs provided only a marginal upward revision to the EU index, with no change in the UK from the preliminary reading. Eurozone September CPI came in as expected at 2.2% headline, 2.3% core.