North American Summary and Highlights 5 Jan
Overview - The USD was generally softer particularly after weaker than expected ISM manufacturing data. GBP and AUD were particularly firm.
North American session
The USD and UST yields were generally softer, the moves assisted by an unexpected if modest decline in December’s ISM manufacturing index to 47.9 from 48.2. USD/JPY slipped to 156.25 after meeting resistance near 157 while EUR/USD rose to 1.1725 after early slippage to 1.1660. EUR/USD still underperformed GBP/USD, which advanced to near 1.3550, as EUR/GBP fell to .8660 from .8680, extending European losses from .87. AUD/USD was also firm at .6715 despite USD/CAD being little changed, as AUD/CAD rallied to .9240 from .92.
European morning session
The USD was slightly weaker through the European morning. USD/JPY dropped half a figure from 157 to 156.50, and GBP/USD gained 30 pips to 1.3460 following stronger than expected UK money data. AUD/USD was also slightly firmer at 0.6685, and the SEK also dropped a couple of figures to 9.22. But EUR, CHF, NOK and CAD were all little changed against the USD.
JPY strength may have been helped by general declines in US and European yields, likely related o uncertainty around Venezuela, following higher yields in Japan overnight helped by hawkish comments from BoJ governor Ueda.
UK money and credit data showed another month of stronger than expected gains, with M4 up 0.8% m/m and net lending to individuals at GBP6.6bn, even though mortgage lending was a little weaker than expected at 4.49bn. Mortgage approvals were, however, higher than expected at 64.53k.