North American Summary and Highlights 21 May
Overview - The USD was little changed though with some volatility on reports from the Middle East. GBP and EUR were resilient to weak PMI data.
North American session
The USD continued to gyrate on the latest reports or rumors coming from the Middle East. Early trade saw the USD getting a bid assisted by comments from Iran’s Supreme Leader insisting enriched uranium remain in Iran reducing Wednesday’s optimism that a deal with the US might be close. The afternoon however saw the USD reverse its gains on talk a deal might still be in the works, leaving the USD little changed, USD/JPY near 159 and EUR/USD near 1.1620. AUD/USD and USD/CAD both saw marginal gains leaving AUD/CAD at .9850 from near .98.
US data was mixed if generally healthy, initial claims at 209k from 212k, April housing starts down by 2.8% but permits up by 5.8%. May’s Philly Fed manufacturing index at -0.4 was weaker than expected but the S and P manufacturing PMI picked up to 55.3 from 54.5, though services at 50.9 from 51.0 remained subdued.
European session
Despite weak European PMI data the EUR and GBP were resilient through the European morning, recovering the ground lost on the initial release of the weak French PMI. French composite PMI was the weakest since the pandemic, and Eurozone composite PMI reached the lowest since November 2003, while UK composite PMI matched the lows seen in 2025 and 2023. But while EUR/USD initially dipped 30 pips to trade below 1.16, it recovered to be slightly higher at 1.1630 by the end of the session, while GBP/USD was also up 10 pips at 1.3440 after an initial dip below 1.3420.
AUD/USD also recovered most of the ground lost overnight, reaching 0.7140 and USD/JPY edged lower through the morning to 158.95. Equity markets were similarly unconcerned by the weakness in the PMIs, rising modestly through the morning helped by generally lower yields. The NOK was the best performer within Europe, with EUR/NOK dipping to 10.75 while EUR/SEK was slightly firmer.