North American Summary and Highlights 14 Jan
Overview - The USD saw some movement but was little changed at the end of the day.
North American session
The USD was weaker early in the session but picked up in the afternoon, though closed off its highs little changed. USD/JPY fell as low as 155.10 before moving back above 158.50. EUR/USD ended in mid-range neat 1.1650. EUR/GBP was little changed but EUR/CHF slipped to .9315 from .9330. Equities were under some pressure but the commodity currencies did not move much.
US data had limited impact with a 0.6% rise in November US retail sales with a marginal negative revision to October, and PPI gains of 0.1% in October and 0.2% in November in line with expectations. Later however gains of 5.1% in December existing home sales and 0.3% in October business inventories were stronger than expected, while the Fed’s Beige Book was improved from the three preceding reports. Political risk eased somewhat as Trump suggested that killings had stopped in Iran.
European morning session
The USD was generally weaker through the European morning, with USD/JPY dropping half a figure to 158.65 and EUR/USD 10 pips higher at 1.1655. However, price action was risk negative more than USD negative, as the AUD fell back, trading 15 pips lower to 0.6685, with equities generally weaker.
The JPY recovery was helped by more warnings about JPY weakness form Japanese officials, with FX diplomat Mimura and Finance minister Katayama saying they were concerned about JPY moves and were prepared to take appropriate action. But the lack of FX intervention so far suggests they may reluctant to pull the trigger with a snap election on the horizon.
There was no data of note during the morning, but bond yields were generally a little lower in line with the weaker risk tone.