North American Summary and Highlights 18 October
Overview - GBP bounced on stronger than expected UK retail sales but could not sustain its gains versus the EUR as EUR and JPY both rose versus the USD after softer US housing data.
North American session
US housing starts were near consensus with a 0.5% decline to 1354k but permits were weaker than expected falling by 2.9% to 1428k. This saw the USD slip versus JPY and EUR with losses extending later in the session, USD/JPY falling to 149.50 from 150, and EUR/USD rising to 1.0865 from 1.0850. With GBP/USD more stable EUR/GBP fully reversed European losses rising to .8330. While the USD was generally softer with oil slipping the USD edged higher versus the commodity currencies, USD/CAD moving above 1.38 and AUD/USD falling to .67.
European morning session
GBP was the only real mover in the European morning, with EUR/GBP dropping below 0.83 for the first time since April 2022 in response to stronger than expected UK retail sales data for September. Although the data only showed a modest 0.3% m/m increase, this compared to a consensus of a 0.3% decline, and follower 1.0% and 0.7% increases in the previous two months, so that the 3m/3m trend was the strongest since the pandemic. EUR/GBP hit a low of 08295 before bouncing to 0.8315.
Otherwise, most pairs were little changed through the session, although there were some modest gains for the scandis and the CHF was slightly weaker. Other than the UK data there were Eurozone current account numbers for August which showed a smaller than expected surplus of EUR31.5bn.