North American Summary and Highlights 17 January
Overview - GBP slipped on weak retail sales while strong housing starts and industrial production lifted the USD.
North American session
US data was stronger than expected, a 15.9% rise in housing starts to 1499k, and a 0.9% rise in industrial production, which contributed to a positive USD tone early on. However, the USD gains were reversed and more after Trump stated he had had a good phone conversation with Chinese President Xi. Into the afternoon, the USD regained a positive tone.
USD/JPY rose to 156.15 from 155.60. EUR/USD saw only modest losses, to 1.0275 from 1.03. EUR/GBP sustained European gains and EUR/CHF moved above .94. USD/CAD was particularly strong, rising to 1.4465 from 1.4410. With AUD/USD little changed near .62 AUD/CAD advanced to .8965.
European morning session
GBP weakened after softer than expected UK December retail sales data which showed a 0.6% m/m decline, taking the underlying 3m/3m trend negative for the first time since June and to its lowest level for a year. EUR/GBP gained 25 pips to 0.8550 before dropping back to 0.8540 by the end of the session.
The USD was mixed, with EUR/USD making modest gains to trade above 1.03, but there was little change in USD/JPY or USD/CHF, and AUD/USD fell back slightly. Other than the UK data, there wasn’t a great deal of news, although the EUR may have got some support from comments from Bundesbank president Nagel who said the ECB shouldn’t rush rate cuts. Eurozone final core HICP data was revised down slightly to 0.3% m/m, 2.7% y/y for December.