North American Summary and Highlights 19 Dec

North American session
The USD fell across the board through the North American session, but without any obvious driver other than a positive equity market picture. While there were some optimistic comments on declining inflation from the Fed’s Barkin, there was only a very modest decline in US yields, so this doesn’t look like the driver. USD/JPY fell a big figure below 144, while AUD/USD gained more than 0.5% to trade up to 0.6770. EUR/USD was up 40 pips at 1.0980.
USD/CAD dropped 50 pips to 1.3340, helped by stronger than expected Canadian CPI data. Headline was unchanged at 3.1% y/y against a market consensus of a drop to 2.9%nd the BoC’s preferred underlying measures were also above expectations, with the exception of common CPI. Nevertheless, CAD strength was only broadly in line with general USD weakness, with Canadian yields only marginally higher. 
US housing starts with a 14.8% rise to 1560k were well above expectations though permits, down 2.5% to 1460k were in line, making the starts ruse look unlikely to be sustained.
European morning session
USD/JPY continued to rise through the European morning, gaining another big figure and a half after gains in Asia, and reaching a high just below 145, as JGB yields continued to decline. The USD was otherwise modestly softer, with EUR/USD and AUD/USD up around 15 pips, and GBP/USD gaining half a figure. There was limited news, with the final Eurozone HICP for November in line with expectations. 
USD/JPY gains continued despite the Japanese government upgrading their view of business sentiment for the first time in two months in December as a central bank survey showed broad recovery in the corporate mood thanks to upbeat profits. The latest report reflected the Bank of Japan's survey last week which showed business confidence at big Japanese manufacturers hit a near two-year high in the three months to December. Big non-manufacturers' sentiment also improved to levels not seen since 1991.