North American Summary and Highlights 4 September

North American session

The USD slipped on July JOLTS job openings data, which fell by a steeper than expected 237k to 7.673m, though the data was not dramatically different from trend in our view. USD/JPY slipped a big figure to a low of 143.80, while EUR/USD rose to a high of 1.095 from 1.055 before settling near 1.080. EUR made marginal gains versus the GBP but corrected lower versus the CHF.

USD/CAD saw a marginal dip from around 1.3550 on an as expected 25bps easing from the Bank of Canada, despite a fairly dovish tone from the BoC, and extended losses as far as 1.35 after the US data. The CAD held on to its post-data gains better than AUD/USD.

Fed’s Bostic at the time of the JOLTS report said risks were now balanced while the Fed’s Beige Book subsequently showed activity rising in only three out of 12 districts. 

European morning session

The USD was marginally on the defensive after Tuesday’s selloff in U.S. equities, with opinion mixed on what it means for FX.  Some FX traders view at as temporary given the volatility in equities, but other note that the S&P500 has failed on the upside twice and this is bad for U.S. equites and the USD. 

The approach of Friday’s U.S. employment report is also curtailing movements, as traders do not want to be squeezed by a stronger set of numbers but would sell the USD on a weak set of data.  USD/JPY is seen to be the leading edge of the USD movements, given the equity volatility could amplify the JPY movements. 

Elsewhere, CHF crept higher versus the EUR given the JPY and equity market movements.  However, some speculation has started in Switzerland that the SNB could consider 50bps rather than 25bps on September 26 to curb CHF strength.