North American Summary and Highlights 27 January

North American session

The USD saw a partial correction from its European losses in North America, with USD/JPY moving above 154/50 from a low of 153.72. USD/CHF moved back above 0.90, EUR/USD slipped back below 1.05 and GBP/USD slipped back below 1.25, though in each case the moves were modest. The USD saw stronger rebounds versus the commodity currencies, USD/CAD rising to touch 1.44 from a low of 1.4331 and AUD/USD seeing a low of .6275. 

US December new home sales were stronger than expected with a 3.6% increase to 698k. Tech stocks remained weak but elsewhere equities were mixed.  

European morning session 

The USD fell sharply against the JPY and CHF and more modestly against the EUR through the European morning. USD declines were a consequence of lower US yields which were themselves a result of a general risk sell off. S&P 500 futures were down more than 1% on the morning following similar losses in Asia, and this lead to declines of around 10bps in US yields along the curve. European equities and yields were also lower, but less so than their US counterparts. The declines in equities were attributed to concerns about the Chinese AI start-up DeepSeek undermining the profitability of the AI sector, and most of the weakness in equities was in the tech sector.  

USD/JPY fell 2 figures on the morning to 154, while USD/CHF fell almost a figure to 0.8980. EUR/USD gains were more modest, up around half a figure to 1.0510. GBP kept pace with the EUR, with EUR/GBP steady near 0.8410, having fallen back late on Friday. AUD/USD gained around 15 pips to 0.63 on the morning, but this only reversed losses seen in Asia. 

Datawise, the German IFO survey showed a modest improvement, supporting the impression from the better preliminary S&P PMI data released last week, although the IFO business climate index rise was small, and the expectations index was unchanged.