Europe Summary and Highlights 14 November
Then USD was generally firmer through the European morning, gaining against almost all the major currencies, with only the CHF and GBP holding their own.
European morning session
Then USD was generally firmer through the European morning, gaining against almost all the major currencies, with only the CHF and GBP holding their own. The scandis saw the biggest losses, with EUR/SEK and EUR/NOK both up around 0.5%, while EUR/USD also fell around 0.2%. AUD/USD fell 0.25% while USD/JPY and USD/CAD were up 0.1%.
FX movements were mostly driven by generally weaker equity markets, following on from the sell off in the US seen on Thursday. CHF strength led to a break in EUR/CHF below 0.92 to new post-2015 lows. GBP opened weak on the back of the overnight report that Chancellor Reeves had abandoned plans to raise in come tax in the November 26 Budget, but after gilt yields spiked higher at the open EUR/GBP fell back to yesterday’s closing levels near 0.8830. Data was unremarkable, with most of the European numbers final data that was little revised from the preliminary data.
Asia session
It is reported in early Asia that the UK government will drop income-tax hike plans ahead of November budget. Prime Minister Keir Starmer and Chancellor Rachel Reeves seems to have bowed to the rising tensions within Labour and voter pushback. GBP/USD dropped 0.35% to trade at 1.3145.
RBNZ’s confirmed that it will ease mortgage loan-to-value restrictions on 1st December, rising 5% for both owner-occupiers (with an LVR above 80%) and investor (with an LVR above 70%). Combined with stronger tier two data, the Kiwi is outperforming majors on Friday. NZD/USD is trading 0.59% higher at 0.5687. AUD/USD is trading 0.1% while USD/CAD slips 0.07%. Japan PM Takaichi backs away from minimum-wage target after pushback from regional firms. USD/JPY is trading 0.03% lower. Else, EUR/USD is up 0.1%.