North American Summary and Highlights 5 November
Overview -
The USD was softer despite strong ISM services data, the move seen due to position squaring ahead of the election results.
North American session
The USD was generally softer in North America with focus on the election meaning there was little reaction to a stronger than expected ISM services index of 56.0 in October, up from 54.9. Earlier September’s trade deficit of $84.4bn was near expectations, if significantly wider.
USD/JPY fell to 151.50 from above 152 while EUR/USD advanced o 1.0930 from 1.09. GBP/USDD moved above 1.30 with EUR/GBP little changed but EUR/CHF advanced to .9435 from .94. AUD/USD rose to .6635 while USD/CAD fell to 1.3850. The CAD saw little reaction to dovish BoC minutes which showed a strong consensus for the more aggressive 50bps October 23 easing.
European morning session
A generally quiet European morning saw the USD generally slightly lower with the riskier currencies generally outperforming. AUD/USD gained 20 pips to 0.6620 an EUR/USD also gained around 20 pips to test 1.09. The CHF performed strongly with EUR/CHF dropping 20 pips to 0.9390. Scandis also made modest gains against the EUR, but EUR/GBP was unchanged. USD/JPY also dropped around 20 pips to 152.20.
There was no data of note, and the dip in the USD was generally seen as position squaring ahead of the election. Option volatility has risen sharply with overnight EUR/USD vol the highest since 2017 and 1 month vol the highest since early 2023, suggesting substantial hedges are being put on.