USD, EUR flows: USD mostly firmer after ISM

The USD has gained a little ground against the JPY, CAD and AUD but is not much changed against European currencies after the slightly stronger than expected December ISM manufacturing survey.  The main index was above expectations, and new orders in particular were strong, rising to the highest level since May 2022. Only the employment index showed some softness. The EUR has been relatively resilient helped by higher short dated EUR yields today, but the USD remains generally firm, and the EUR remains well below the level suggested by the 2 year yield spread correlation which dominated trading in 2024.