North American Summary and Highlights 16 April
Overview - Equities fell on chip export restrictions and comments from Fed’s Powell. This saw the USD weaker.
North American session
Equities came under early pressure on restrictions to chip exports and extended their losses after Fed’s Powell looked to risks on both sides of the Fed mandate while signalling no rush to change policy. USD/JPY, previously stable near 142.70, slipped on Powell’s remarks with the move extending below 142 as equity losses deepened. EUR/USD was steady through most of the session but saw late gains to touch above 1.14. EUR/GBP advanced above .86.
USD/CAD slipped to 1.3875 from 1.3925 after the Bank of Canada left rates unchanged at 2.75% and stated it would proceed carefully going forward. AUD/USD was little changed near .6370.
US data had limited impact being fairly close to expectations. March retail sales rise by 1.4% with ex auto sales up by 0.5%. March industrial production fell by 0.3% on utilities but manufacturing rise by 0.3%.
European morning session
The European morning saw a general recovery in riskier currencies, with USD/JPY gaining half a figure to 142.80 and USD/CHF gaining 30 pips to 0.8175. AUD/USD also gained 25 pips to 0.6375, while EUR/USD was little changed. The risk recovery reflected similar gains in equities, which reversed the decline seen in the Asian session.
UK CPI data came in on the soft side of consensus, with the headline at 2.6% y/y, although the core was in line with market expectations at 3.4%. GBP was little affected by the data, falling a little early in the session in reaction to the overnight equity weakness, but gaining through the morning to finish higher, with EUR/GBP around 5 pips down on the morning just above 0.8560.