North American Summary and Highlights 24 Jan

Overview - The USD lost ground in Europe but recovered in North America, with eyes on PMI reports. The CAD fell after the BoC meeting delivered a more dovish tone while holding rates steady as expected.
North American session
The USD fell back early in the North American session, with EUR/USD gaining around 40 pips and USD/JPY losing 60 pips, but was little changed by the end of the session. USD/CAD bucked the trend, rising half a figure from a 1.3430 low after the BoC meeting, as the BoC removed their bias to tighten, focusing now on how long to keep rates at the current 5.0%. USD/CAD later extended its advance above 1.35 as the USD rebounded. Early pressure on the USD came from falling UST yields, but this was reversed as January’s S and P PMIS picked up, manufacturing to 50.3 from 47.9 and services to 52.9 from 51.4. UST yields advanced further after a weak 5-year auction.
European morning session
The USD fell back through the European morning session, with GBP the best performer after UK PMIs came in on the strong side of consensus. UK composite PMI rose to 52.5, its highest since July. GBP/USD gained around half a figure and settled above 1.2750, while EUR/GBP fell 10 pips to 0.8540. EUR/USD also gained around 30 pips to trade above 1.09, despite some early softness after French and German PMIs disappointed. But despite the weakness in French and German PMI, Eurozone PMI showed a rise on the month and was only marginally below consensus. The USD also suffered from general gains in equities. The USD even lost ground against the JPY, with USD/JPY down around 40 pips to 147.50. Other currencies moved in line with the EUR.