North American Summary and Highlights 2 December
Overview - The USD was little changed, lifted by ISM manufacturing data but later hit by comments from Fed’s Waller.
North American session
The USD picked up on a stronger than expected ISM manufacturing index of 48.4 for November, up from 46.5 in October, but later moved off its highs, and after Fed’s Waller stated he was leaning towards easing in December, ended up close to where it had stared the session, EUR/USD back above 1.05 after moving below on the data. GBP, AUD and CAD saw similar moves.
USD/JPY saw less response to the data but slid from near 150 to near 149 in mid-session as UST yields slipped. A recovery above 149.50 was undermined by Waller’s comments but the pair remained above the low.
European morning session
A quiet European morning saw some modest EUR losses, but otherwise little net FX movement. Early trading saw the EUR generally softer, with EUR/USD dipping marginally below 1.05 before bouncing back to just below opening levels around 1.0520. USD/JPY also started softer, dipping to 150 before bouncing back. EUR/GBP tested down to a low of 0.8270 from an open at 0.8290 before bouncing back to 0.8280.
The EUR’s weakness was attributed to increasing concerns about a possible government collapse in France, which would stall plans to curb a burgeoning budget deficit. French right wing RN party president Jordan Bardella said RN will likely back a no-confidence motion against the government on Wednesday unless there is a "last minute miracle". Otherwise, there was some final manufacturing PMI data from Europe, with the Eurozone index unrevised at 45.2 and the UK index revised down to 48.0 from 48.6.