North American Summary and Highlights 30 July
Overview - The USD fell further, after weaker than expected Q2 GDP data, led by USD/JPY, where intervention was suspected.
North American session
The USD fell further, led by a sharp slide in USD/JPY below 159.50 from around 162.75 that was suspected as triggered by intervention. The USD was weaker elsewhere, with a 1.5% annualized increase in Q2 GDP weaker than expected, though solid outside negatives from net exports, inventories and government. Core PCE prices at 3.4% annualized were slightly softer than expected in Q2, with June up by only 0.1%. Initial claims corrected higher to a still low 197k from 188k.
EUR/USD moved above 1.15. EUR/GBP slipped to .8560 from .8580 though there was little reaction to the BoE decision which left rates unchanged though with a 6-3 vote rather than 7-2. EUR/CHF was also softer, moving back below. 930. AUD/USD broke above .70 while USD/CAD slipped to 1.40 from 1.4050.
European session
Eurozone data coming in largely on the upside of expectations on both sides of the equation. EZ Q2 GDP at 0.4%q/q vs mkt 0.2%, picking up to 1%y/y (mkt 0.5%). Business investment as with the US, an upside influence. Spain flash Jul HICP at 3.8% from 3.6% (mkt 3.7%), and German state CPI figures suggesting that the national figure later will probably come in at least 2.7% from 2.3% previously, as expected.
EUR/USD had a bit of minor early backfilling of the post-FOMC dollar sell move, but is back to flat and now not far off the highs and key next key resistance (1.1487/1.15). Sterling broadly flat too into the BoE. NZD/USD an outperformer post FOMC, with strong rebound in ANZ business outlook also helpful. Nasdaq around +0.8%, taking back some of Wednesday’s losses. Brent pretty flat after initially higher after the US followed through with Trump’s threats to retaliate. Monday’s gap holds the high.