North American Summary and Highlights 9 January
Overview - In a subdued FX market focus was on the GBP, which came under pressure early before a partial recovery.
North American session
With markets partially closed for the funeral of President crater, it was a quiet session. EUR/GBP came of the highs to around .8370 while GBP/USD edged above 1.23. EUR/USD was stable near 1.03. USD/JPY recovered from a dip to a low of 157.58 to return above 158.
There was no US data but some Fed talk, with Collins, Harker and Schmid seeing a cautious approach to easing while still expecting some lowing of rates, while Bowman suggested that no more easing was needed.
European morning session
Most of the FX action was in GBP, which weakened at the open, with EUR/GBP rising to 0.84 from 0.8375 in the opening hour, at the same time as we saw a further general rise in UK yields. This came once again without any significant news, suggesting some foreign selling of gilts. UK yields edged back lower and GBP edged higher in the rest of the session, but only partially corrected the early move.
USD/JPY edged a little lower, dropping back to 158.00 from an open around 158.15, but EUR/USD was little changed near 1.03. German industrial production data was stronger than expected in November, rising 1.5% m/m, offsetting the weaker impression from Monday’s orders and sales data, while the German trade surplus was larger than expected at EUR19.7bn due to a decline in imports, but none of this data had a noticeable FX impact. The scandis were both slightly firmer against the EUR. While EUR/CHF edged up a tad.