North American Summary and Highlights 27 Jun
Overview - The USD was slightly firmer, most notably versus the CAD after Trump broke of trade negotiations with Canada.
North American session
The USD was generally marginally stronger, with the biggest move coming on USD/CAD, which broke above 1.37 after Trump broke off trade negotiations with Canada citing Canada’s Digital Service Tax, and stated Canada would receive its tariff level in the next seven days. Otherwise, USD gains were modest. USD/JPY gains stalled ahead of 145. EUR/USD found support below 1.17 after an early move above 1.1750. GBP/USD saw a brief move below 1.37 while AUD/USD fell to .6525 from .6550. EUR/GBP/ was firmer peaking above .8550 while EUR/CHF and EUR/SEK largely erased European losses.
May US core PCE prices were marginally stronger than expected but this had little impact with personal income and personal spending both weak at -0.4% and -0.1% respectively. April Canadian GDP fell by 0.1% with a similar decline projected for May but this was not a major factor in CAD slippage.
European morning session
EUR/USD gained 20 pips to 1.1710 in the European morning, while the CHF and scandis made even larger gains, with EUR/CHF and EUR/NOK dropping around 0.25%, and EUR/SEK down 0.5%. AUD, CAD and JPY were not much changed against the USD, and GBP just about kept pace with the EUR.
European currency strength mostly preceded the French and Spanish preliminary June inflation data, which came in stronger than expected at 0.8% and 2.2% y/y respectively. Italian business confidence was also slightly stronger than expected, but the strength of European currencies looks most likely to be related to the strength of European equities, which gained around 1% on the morning following strong overnight gains in the US indices.