North American Summary and Highlights 19 Dec
Overview - JPY weakness was the story of the day, USD/JPY and EUR/JPY both moving sharply higher in Europe, and marginally extending the move in North America.
North American session
USD/JPY remained firm but stabilized around 157.50. EUR/USD found support at 1.17 and rose to 1.1720, seeing EUR/JPY above 184.60. Equity strength gave some support to the commodity currencies, as AUD/USD found support at .66 and USD/CAD slipped from 1.38, though CAD gains corrected in the afternoon.
There was not much news. Fed’s Williams saw no urgency to act on policy. October Canadian retail sales were weak at -0.2% but with preliminary signals for November positive. November US existing home sales saw a third straight rise, by 0.5% to 4.13m. Final December Michigan CSI revisions were marginal.
European morning session
USD/JPY continued to move sharply higher through the European morning, gaining 135 pips to 157.35 from an open near 156. EUR/JPY made yet another all-time high reaching 184.34. There is no obvious rationale for JPY losses, with JPY yields slightly higher following the BoJ rate hike and nothing surprising coming from BoJ governor Ueda’s press conference, but the lack of surprises has clearly been taken as a green light to sell JPY. Despite recent verbal intervention, there is so far no new comment from Japanese officials on JPY weakness nor any sign of actual FX intervention.
Otherwise, the USD was generally not much changed, making only very marginal gains against the EUR, CAD and scandis. GBP/USD was little changed and EUR/GBP edged very slightly lower after UK retail sales data showed a small 0.1% decline in November, but with a slight upward revision to October the trend remained quite steady. UK public sector borrowing in November was a little higher than expected at GBP11.65bn. Otherwise, the German Gfk consumer climate index for January dipped to its lowest since March 2024.