North American Summary and Highlights 16 Sep
Overview - Despite positive data, the USD was weaker with Wednesday’s FOMC decision approaching.
North American session
US data, with a 0.6% rise in August retail sales and to a lesser extent a 0.1% rise in August industrial production, was on the firm side of expectations, but generated only a brief reaction before a negative USD tone resumed. Stephen Miran was sworn in as a Fed governor, adding a likely dovish vote.
USD/JPY fell below 146.50 from 147.10 and EUR/USD advanced to 1.1860 from 1.1.1810. EUR/GBP was stronger near .8690 but EUR/CHF was weaker near .9330.
Canadian CPI at 1.9% yr/yr in August from 1.7% was slightly softer than expected. USD/CAD at 1.3750 from 1.3760 was slightly softer but AUD/CAD advanced to .9185 from .9170.
European morning session
EUR/USD gained 35 pips through the European morning, threatening the highs of the year at 1.1830 seen in July. The USD losses were most pronounced against the EUR and CHF, with the EUR gaining ground on the crosses. JPY, AUD, NOK and CAD were little changed against the USD, while GBP/USD gained just 20 pips and USD/SEK fell just 0.15%.
Rationale for EUR strength wasn’t clear. The September ZEW survey was a little stronger than expected, but only marginally stronger than August and not strong enough to suggest a reason for EUR strength. However, most of the EUR/USD gains did follow the data, which also included Eurozone wage data which was in line with consensus at 3.7% y/y.
Earlier, UK labour market data was also in line with consensus, showing a modest decline in payrolled employment in the August HMRC data and average earnings growth in line with consensus for August. EUR/GBP showed little initial reaction to the UK numbers.