European FX Close - A sideways day for the Usd

It has been a week in the G10 FX space where in the end we haven't seen a great deal of movement compared to the start of proceedings on Monday. The Krone has been the best performer rising by 0.2% vs the Usd, while the Yen has been the worst, falling by 0.8% vs the US unit. For most of the G10 currencies though moves against the Dollar on the week have been minimal.

There is certainly a distinct impression from FX market price action that markets are now biding their time for the biggest of known event risks, the US election on November 5th.

Trade in the DXY was mostly sideways, with a minor sub 104.00 foray after the durable goods data, despite the fact that the "core" reading rose by 0.5%, well above the 0.1% expected.

The final UMich sentiment reading came in at 70.5 compared to the initial 69.0 estimate.

Earlier it had been a morning of mixed Eurozone data.

The German IFO survey beat expectations rising to 86.5 in October compared to the 85.6 forecast and the 85.4 print in September, but the ECB's inflation expectations survey fell by more than expected. The one year outlook slid to 2.4% from 2.7%, while the three year timeframe fell to 2.1% from 2.3%. Finally EZ M3 Money Supply rose by 3.2% y/y, which was better than the 2.9% y/y forecast and was the highest reading since December 2022.

Meanwhile the ECB's Simkus stated that he sees no obvious case for a 50bps interest rate cut, but admitted that there is a need to further reduce still restrictive rates.

On the US election front, a Reuters/Ipsos poll showed that Trump has gained support from Hispanic and Black voters, while Harris has increased her support from white women.

The Canadian retail sales report for August was a bit of an odd one. The headline reading rose by 0.4%, just below the previous flash estimate, but the ex autos figure fell by 0.7%, way below the 0.4% consensus forecast, which suggests that autos played a major role in the positive headline number. The estimate for September is for another rise of 0.4%. TorDom pointed out that ex-autos Canadian retail sales were the weakest in three months.

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