Europe Summary and Highlights 14 August
GBP and the USD made gains through the European morning.
European morning session
EUR/GBP dropped 20 pips to 0.8600 after the UK June and Q2 GDP data came in much stronger than expected at 0.4% m/m and 0.3% q/q respectively. Admittedly, this rise was based on a fresh rise in government spending and a further build in inventories as well as net trade that failed to turn negative after the distorted Q1 jump. Downside risks still persist for H2 and into next year, but for now GBP will continue to benefit from perceptions of UK outperformance of the Eurozone.
GBP/USD was only marginally higher at 1.3580 with the USD also making gains through the session, with EUR/USD dropping 20 pips to 1.1680 and USD/JPY 15 pips to 1.4660. AUD/USD dropped 20 pips to 0.6530 and USD/CAD gained 17 pips to 1.3775.
EUR/NOK edged a little lower after the Norges Bank rate decision, which as expected left rates unchanged, with Norges Bank indicating further scope for easing this year in line with their June statement. But after dipping as low as 11.87 mid-session, EUR/NOK finished only a couple of figures lower at 11.91.
Asia session
The July Australian labor data is solid with unemployment rate lowered to 4.2% from 4.3% y/y. Headline employment change at 24.5k is overshadowed by strong full time employment of 60.5k. AUD/USD jumped higher to 0.6568 before retracing partially to trade 0.09% higher at 0.6552 while USD/CAD and NZD/USD are unchanged.
The JPY gained strongly on Thursday as USD is broadly weak, further exacerbated by US Treasury Secretary Scott Bessent remark on BoJ that they should hike rates to control inflation. It is quite uncommon for such a direct criticism, especially since Bessent also said he raised such topic with Ueda. USD/JPY slipped 0.67% lower at 146.38 with JGB yields higher. Else, EUR/USD and GBP/USD is down 0.01%.