North American Summary and Highlights 18 Dec
Overview - Softer than expected US CPI data saw the USD slip but it ended well off its lows. GBP saw some support from a BoE vote showing four dissents from a decision to ease.
North American session
US CPI was significantly softer than expected, falling to 2.7% yr/yr in November with the core at 2.6%, both from 3.0% in September, with October data not published. The rise over the two months was 0.2% both overall and core, with the latter rounded up. December’s Philly Fed index was weaker at -10.2 from -1.7, but initial claims at 224k from 237k were close to expectations. The BoE eased by 25bps but some were surprised by four dissenting votes. The ECB left rates on hold as expected.
The USD slipped after the CPI but came off its lows and USD losses were generally moderate, USD/JPY to near 155.60 from 155.80 while EUR/USD advanced to 1.1725 from 1.1715. GBP picked up on the BoE with EUR/GBP softer near .8760 from .8780. Equities were supported by the US CPI, but AUD and CAD saw limited movement.
European morning session
European currencies dropped back through the European morning, with EUR/USD losing 20 pips to 1.1725. Most of the other European currencies were dragged a little lower against the USD too, but the EUR was generally a little weaker.
EUR/NOK spiked above 12 just before the Norges Bank decision to leave rates unchanged (as expected), but subsequently fell back to 11.95 leaving the NOK little changed against the USD on the morning. EUR/SEK was little changed after the Riksbank also left rates unchanged as expected. The JPY, CHF and commodity currencies were little changed against the USD.
The other significant data for the morning was the French INSEE business survey, which showed a surprise rise to its highest since March 2024.