North American Summary and Highlights 26 August
Overview - US data, particularly core PCE prices for July and a revised Q2, gave the USD some support.
North American session
The USD picked up after the morning US data. July core PCE prices were as expected at 0.2%, but rose by 0.246% before rounding, while Q2 core PCE prices were revised up to 3.6% annualized from 3.4%. Gains of 0.4% in July personal income and 0.2% in personal spending were also stronger than expected. Q2 GDP was unrevised at 1.5% but consumer spending was revised up to 3.4% from 3.2% on services, net exports being the largest offsetting negative. July durable goods orders with a 1.1% rise overall were stronger than expected, but the ex transport gain of 0.4% was below consensus and recent trend.
USDD/JPY rose to 159.40 from 159, while EUR/USD fell to 1.1650 from 1.1670. EUR/GBP and EUR/CHF both made modest gains. The USD saw only modest losses versus AUD and CAD, while AUD/CAD stabilized near .9950.
European session
Some mild rotation amongst commodities the main action over the last session. AUD remains firmer coming out of the higher CPI print with hike odds moving up towards 40% for the next meeting. AUD/USD stretched towards 0.7180/72 highs ahead of the bigger 0.7250/75~ tops and AUD/NZD also bounced for the recent 1.21~ band upside ahead of the wider 1.22.
USD/NOK and USD/CAD otherwise towards the week’s highs, if only very mildly offered on the day, as oil continues to slip back (CAD also keeping an eye on any further US responses to Canada’s announced tariff response, though still quite contained).
Oil prices remain towards the low side of the recent action with Iran and Oman discussing ‘a joint temporary navigational corridor’ through the Strait. Iran-Pakistan wider talks also still continue. Brent front month off over $2 ½ and easing back towards 85/84 rang downside again.