European Summary and Highlights 12 July
The USD was generally a little weaker against the riskier currencies through the European morning, with GBP the best performer.
European morning session
The USD was generally a little weaker against the riskier currencies through the European morning, with GBP the best performer. GBP/USD rose 40 pips to 1.2950, while EUR/USD gained around 20 pips to 1.0885, putting EUR/GBP just above the 0.84 level. There were also modest gains for AUD and CAD, but USD/JPY roe marginally to 159.15, and USD/CHF was not much changed.
The SEK fell back through the session as Swedish June CPI data came in weaker than expected at 2.6% headline and 1.3% core, against 2.8% and 1.6% expected. EUR/SEK rose 4 figures to 11.47, although this was still quite a modest move compared to the sharp NOK decline after similarly weak Norwegian data on Wednesday. Spanish and French final June CPI data were both revised slightly higher to 0.4% and 0.2% m/m respectively.
Asia session
After the slump triggered by U.S. CPI and potentially exacerbated by BoJ's intervention (which is somewhat denied by Kanada as he said he is "puzzled" by media report BoJ intervened), USD/JPY slumped again in the early hours on Friday. Once again the liquidity is thin, seems like a good time for a cost efficient intervention. However, with the fog of war cleared, it seems to be a rate check from the BoJ that spooked the market, instead of an actual intervention. With more verbal intervention in the Asia morning, there is destined to be more volatility in the USD/JPY space as we see a rebound of 0.22% currently to 159.10 with JGB yields fallings.
Risk sentiment is mixed with Nikkei falling more than 2% and HSI up more than 2%. Chinese equity is just in the red wile U.S. three major equity indexes are little changed individually. AUD/USD benefited from softer USD and is trading 0.14% higher at 0.6769, NZD/USD is also up 0.1% while USD/CAD slipped 0.09%. Else, EUR/USD is up 0.03% and GBP/USD unchanged.