North American Summary and Highlights 18 Sep
Overview - The USD was weaker in Europe but rebounded on stronger than expected US data. The GBP was slightly weaker after the BoE announcement.
North American session
The BoE left rates unchanged but with 2 dissenting votes for easing. The GBP slipped slightly on the announcement, with losses extending through the session, but EUR/GBP gains from .8670 lost momentum ahead of .87.
US data was stronger than expected, with initial claims more than reversing a preceding spike, falling to 231k from 264k, and continued claims down by 7k to 1.92m. September’s Philly Fed manufacturing index bounced to 23.2 from -0.3. This lifted the USD across the board. EUR/USD fell to 1.1750 from 1.1820 before correcting to 1.1780. USD/JPY rose from 147.40 to 148.27 before correcting to 147.90.
European morning session
The USD was generally lower through the European morning, except against the JPY. EUR/USD gained half a figure to 1.1840, with GBP, AUD, scandis and CHF keeping pace. The CAD lagged behind, with USD/CAD just dropping 20 pips to 1.3770, while USD/JPY was unchanged.
The main news of the morning was the Norges Bank rate cut of 25bps, which had been expected by the majority, but was accompanied by a less dovish rate path forecast, so there was no net impact on EUR/NOK after an initial move higher. Otherwise, there was little news, but there was notable strength in equity markets, with S&P 500 futures making another new all-time high and gains of more than 1% in European stocks.