North American Summary and Highlights 26 Jan

North American session

The USD moved slightly firmer through the US session, gaining around 10 pips against both the EUR while USD/JPY edged back above 148 in a quiet session. GBP/USD slipped to near 1.27 as EUR/GBP edged higher. The commodity currencies largely erased gains seen in Europe, though CAD showed more resilience than AUD.

The US data was on the strong side of expectations, supporting the USD gains. December’s 0.3% gain in personal income and 0.2% gain in the core PCE price index were in line with expectations, though the 0.7% rise in personal spending exceeded the consensus. Q4 totals had already been seen with the GDP report. December’s 8.3% increase in pending home sales was well above expectations but consistent with recent signs of revival in the NAHB and MBA surveys, as housing demand responds to lower mortgage rates.

European morning session

The EUR and particularly the CHF were firmer through the European morning session, bouncing after Thursday’s losses. USD/CHF fell half a figure to 0.8632, while EUR/USD gained around 25 pips to 1.0865 after a brief dip early in the session. USD/JPY briefly traded up above 148, but fell back to trade lower at 147.70 by the end of the morning.  The USD was also general weaker against the commodity currencies.

News was quite limited. German Gfk consumer confidence dipped in February to its lowest for a year, but French confidence was steady. Eurozone M3 showed the first y/y rise since June at 0.1%, but this is still a very weak level, and household loan growth at 0.3% y/y was the weakest since 2015.