North American Summary and Highlights 4 Aug
Overview - It was a subdued day in FX markets though USD/JPY was slightly softer despite gains in equities.
North American session
It was a subdued session in North America with little news. Trump stated he would replace resigning Fed Governor Kugler and sacked BLS statistician McEntarfer this week. June factory orders were as expected at -4.8% but with a 0.4% increase ex transport, while the Fed’s Senior Loan Officer Opinion survey suggested weaker investment demand.
USD/JPY slipped marginally below 147 while EUR/USD had little direction near 1.1570. Equities advanced but the riskier currencies could not sustain a positive open, GBP/USD slipping back below 1.33, AUD/USD slightly softer near .6460 and USD/CAD little changed near 1.3780.
European morning session
The USD was mostly little changed through the European morning. Small gains seen in mid-session were mostly reversed by the end of the morning. GBP was an exception, with GBP/USD gaining 20 pips to 1.33, while the CHF was weak, with USD/CHF rising 30 pips to 0.8090.
Swiss July CPI data was a little stronger than expected, rising 0.2% y/y in July against the 0.1% expected, and the CHF rallied very briefly on the news before reversing lower. Swiss sight deposits for the latest week showed a modest decline, reversing some of the rise seen in recent weeks which might have been indicative of SNB intervention. The rise in the latest week suggests that support for EUR/CHF at 0.93 was not due to SNB action, and the EUR/CHF rise may reflect concern about the 39% US tariff on Switzerland announced last week.