North American Summary and Highlights 24 September
Overview - The USD remained firm, supported by data, Fed talk and oil, even with a brief dip in the latter.
North American session
The USD remained firm and was little changed overall, though did see a dip on reports that the US and Iran were discussing a phased reopening of the Strait of Hormuz, that was subsequently gradually unwound, with attacks by Yemen’s Houthis on Saudi Arabia causing concern. US data continues to come in strong, with initial claims still low at 197k from 198k and August new home sales up by 6.4% to a year to date high of 684k. Williams and Paulson were the latest formerly dovish Fed speakers to signal that they were open to further rate hikes.
USD/JPY touched 159 while EUR/USD kept to a tight range near 1.1370. EUR/GBP was marginally firmer. USD/CAD rose to 1.4140 from 1.4120. Slippage in AUD/USD was marginal, not threatening .70.
European session
As wider market takes a breather after Wed’s US Treasury yield and dollar charge, the various central bank meetings providing the main action this morning.
CHF remains pressured out of the SNB meeting, with USD/CHF stretching the year highs. It sees inflation holding 0.7-0.8% out to 2028 based on unchanged interest rates. That dovish signal keeps CHF the increasingly stand out extreme low yielder at a time of broader and faster tightening elsewhere.
Norges Bank opts to exercise the hike it flagged in June, but from here has a central view of rates remaining steady before eventually trimming, although remaining responsive to external price impulses. NOK sees a 20-30 pip lift, but the overall message is already more than priced in to the short-end. Focus bigger picture is more on US-Iran talks and oil.
Riksbank delivers a hawkish hold, signalling an earlier hike than previously projected. EUR/SEK also some 30 odd ticks off, and rolling back from firm resistance.