North American Summary and Highlights 17 August
Overview - The USD was softer in Europe but corrected higher in North America assisted by gains in oil.
North American session
North America saw the USD correct from recent weakness to end little changed on the day, assisted by gains in oil which lifted UST yields, due to Trump pessimism on the prospects of a deal with Iran. US data was minor, but on the firm side of expectations, with August’s Empire State manufacturing survey at 20.6 from 15.5 the strongest since December 2021 while August’s NAHB homebuilders index picked up to a still subdued 34 from 33.
USD/JPY picked up to 159.50 after touching below 159 in Europe. EUR/USD slipped to 1.1580 after touching above 1.16 in Europe. GBP/USD slipped to 1.3540 from 1.3560. AUD/USD slipped to .71 from .7120. USD/CAD saw an early dip below 1.3850 assisted by a rise in Canadian CPI to 3.0% in July from 2.8% in June but later rebounded to 1.3875.
European session
Dollar generally remains on the back foot, leaking lower across the board, with the low volatility, solid risk summer drift tone, together with the retreat in Fed expectations, playing with the grain.
As well as firmness in risk/USD (AUD,NZD,SEK..), CHF is also firmer on the morning in technical driven trade, as EUR/CHF initially backs off the test of 0.94~, the Dec25 highs.
EUR/USD tests to the mid-June highs just above 1.16, before consolidating just off the figure.
Twin-track market picture continues, with the low vol, risk/USD summer mood on the one hand, but absolutely no sign of progress from the US-Iran staring contest on the other. Brent +$1, just off $90.