North American Summary and Highlights 15 Jan
Overview - The USD was supported by stronger than expected US data, mainly against the European currencies.
North American session
US data was stronger than expected, with initial claims falling to 198k from 207k and both the Philly Fed and Empire State manufacturing surveys recording positive January readings after negative Decembers. The USD, already rising ahead of the data, but the gains faded partially in the afternoon.
USD/JPY after bouncing to 158.88 returned to near pre-data levels near 158.50 while positive equities helped AUD/USD advance to touch .67 and USD/CAD edge below 1.39. EUR/USD fell from pre-data levels around 1.1635 to near 1.16. The EUR saw gains versus both GBP and CHF.
Fed speakers varied in tone but none sounded in a hurry to ease. The US announced a deal with Taiwan that would reduce tariffs in exchange for investment in the US.
European morning session
The USD was mixed through the European morning, losing ground to the JPY and AUD but gaining against GBP. GBP initially rose slightly following stronger than expected 0.3% rise in November UK GDP data, which showed a 0.3% m/m gain in services and a 1.1% gain in industrial production, but these gains were more than reversed by the end of the session, with EUR/GBP finishing around 10 pips higher at 0.8670. The higher than expected £23.7bn UK November trade deficit may have contributed to the reversal.
EUR/USD was not much changed, but the SEK gained a little with EUR/SEK down 2 figures to 10.68.