North American Summary and Highlights 13 Oct
Overview - The USD largely reversed Friday’s losses as US-China trade worries eased, though equities managed only a partial reversal of Friday’s losses.
North American session
It was a subdued session with bonds closed for Columbus Day, though equities were open and firmer, if not fully erasing Friday’s losses. The USD maintained or marginally extended European gains, USD/JPY near 152.25 and EUR/USD near 1.1575. GBP/USD and AUD/USD were little changed, but USD/CAD advanced to 1.4035 from near 1.40, with AUD/CAD near .9150 from .9120.
European morning session
The USD and the riskier currencies made gains through the European morning as equity markets recovered from Friday’s dip triggered by Trump’s threat of increased tariffs on China. EUR/USD dropped 30 pips to 1.1590 while USD/JPY gained 40 pips to 152.20, but AUD/USD was little changed and the best performer through the morning was the NOK, with USD/NOK falling 3 figured to 10.07. GBP/USD and EUR/USD both dropped around 0.1%.
There was no data of note and little reaction to Sunday’s announcement of PM Lecornu’s new cabinet, which was little changed from his old cabinet. Notably, he reappointed Roland Lescure, a close ally of President Emmanuel Macron, as finance minister. The new government will face a vote of no confidence by the end of the week, and it remains unclear whether they have the support to survive.