North American Summary and Highlights 20 December

North American session

US core PCE prices were weaker than expected in November, rising by only 0.1%, while gains of 0.3% in personal income and 0.4% in spending were also slightly below expectations. The USD dipped on the release and while the initial reaction was modest, USD losses extended into the afternoon, while equities rallied. 

GBP/USD was particularly strong, rising to 1.26 from near 1.25. EUR/USD gains stalled ahead of 1.0450 as EUR/GBP slipped below .83 but EUR/CHF rebounded back above 0.93. USD/JPY slipped to 156 from 156.80. AUD/USD rose to .6270 from .6230, while AUD/CAD rose to .90. The leader of Canada’s New Democratic party stated he would vote against the government in a vote of confidence, raising risk of an election early in 2025. Efforts to avert a US government shutdown continued. 

European morning session 

The USD edged slightly lower through the European morning in fairly quiet trade. EUR/USD gained around 15 pips to 1.0390, while USD/JPY slipped 25 pips to 156.75. The CHF was the best performer, with EUR/CHF falling back below 0.93 and USD/CHF losing around 25 pips to 0.8945, helped by generally weaker equity markets.  

GBP underperformed, following slightly weaker than expected retail sales data, which showed a 0.2% m/m rise in November. EUR/GBP edged up to 0.8305 and GBP/USD was steady at 1.25. SEK lost some of Thursday’s gains, with EUR/SEK gaining 3 figures to 11.47.