North American Summary and Highlights 7 October

North American session

In an absence of major news USD/JPY kept close to 148 and EUR/USD stayed in a narrow range around 1.0975. EUR/GBP gains stalled near .84 while EUR/CHF was weaker near .9370. Weaker equities put some pressure on the commodity currencies, AUD/USD falling to .6750 from .6785 and USD/CAD rising to 1.3630 from 1.3585.

Fed’s Kashkari persisted with a fairly dovish tone despite Friday’s strong data but UST yields were higher. US August consumer credit followed a very strong July with a moderate rise of $8.9bn, slightly below consensus. 

European morning session

Mild risk aversion was the main theme of the European morning, with equities generally moving lower. The JPY and CHF both made small gains and GBP and the AUD fell back. USD/JPY lost around 10 pips to 148.30, while EUR/CHF fell 20 pips to 0.9395. Meanwhile EUR/GBP rose around 25 pips to 0.8390 and AUD/USD dropped 15 pips to 0.6785. EUR/USD was very marginally lower at 1.0960.

The only data of note during the session was the German August factory orders data, which was much weaker than expected, falling 5.8% m/m. However, this followed two months of strong gains, and the July increase was revised up to 3.9%, so the 3m/3m trend actually improved. EUR/USD wasn’t really affected. Eurozone retail sales rise 0.2% in August, in line with consensus.