North American Summary and Highlights 19 Jan
Overview - The USD was generally softer with US markets on holiday. Leaders from Germany and the UK suggested caution over retaliatory tariffs against the US.
North American session
US markets were closed for the Martin Luther King Day holiday but the USD had a softer tone, particularly versus the riskier currencies. Comments from German Chancellor Merz suggested caution over retaliation against Trump from the latest tariffs, following similar comments from UK PM Starmer in the European morning. USD/JPY was the exception to the modestly softer USD tone, holding steady.
December Canadian CPI was stronger than expected at 2.4% yr/yr from 2.2%, but inflated by a year ago sales tax holiday. The BoC’s core rates were on balance softer than expected, with CPI-Median falling to 2.5% from 2.8%. Later the Q4 BoC business outlook survey was stronger than in Q3, both for signals on activity and prices. The data had little impact, USD/CAD slippage reflecting the USD tone.
European morning session
The USD edged a little lower through a largely newsless European morning, with the JPY the best performer of the majors. USD/JPY tested 158 before settling around 30 pips lower at 158.10. The riskier currencies made more modest gain of 0.1% or less, with EUR/USD gaining just around 5 pips to 1.1615.
The best performer of the morning was the NOK, with EUR/NOK dropping 4 figures to 11.71, though with no obvious trigger beyond some modest gains in the oil price.