North American Summary and Highlights 10 Dec

North American session

Ahead of the FOMC the USD was generally softer, USD/JPY falling to 156.35 from 156.75 and EUR/USD rising to 1.1660 from 1.1635. A slightly lower than expected 0.8% rise in the Q3 employment cost index may have played a part but got little immediate response. The Bank of Canada left rates unchanged as expected. The BoC noted recent stronger data but did not see its 2026 outlook significantly changed. USD/CAD initially bounced on the BoC announcement but had turned lower ahead of the FOMC decision.  

The FOMC eased by 25bps with the dots unchanged from September. The USD initially slipped on the decision but picked up early in Powell’s press conference when he said rates were now in the plausible range of neutral. However later in the press conference USD losses resumed, comments that non-farm payrolls may be overstated and that the actual job picture is marginally negative noted. USD/JPY fell below 156 and EUR/USD touched 1.17. USD/CAD fell below 1.38 from 1.3850 ahead of the BoC decision while AUD/USD rose to .6680 from .6640. EUR/GBP was fairly stable but EUR/CHF fell to .9355 from .9370. 

European morning session 

There was little net change in most FX rates in the European morning. Although the morning started with EUR/JPY pressing higher to test the all-time highs reached on Tuesday, it came up just short and retraced the moved by the end of the session.  There were some small gains for the SEK, with EUR/SEK down 2 figures to 10.87. These came after a very mixed set of Swedish data, which saw industrial production fall a sharp 6.6% m/m in October, but following a 5.0% September gain. Household consumption also fell 0.9% in October, and GDP fell 0.3%, but these came against the background of previous strength. Meanwhile, new manufacturing orders rose a strong 12.1%. EUR/NOK initially rose slightly as core CPI data came in slightly weaker than expected at 3.0% y/y, but gains were short-lived.