North American Summary and Highlights 21 Apr
Overview - The USD was firmer primarily on Middle East risks but US data and Senate hearings for Fed Chair nominee Warsh also provided some support.
European and North American sessions
The USD was mostly stronger. The primary focus was on the Middle East with Trump stating he did not plan to extend the ceasefire with Iran past the Wednesday deadline of 8pm ET, if no deal is reached before then, and prospects for fresh talks uncertain. US data was stronger than expected, with retail sales up by 1.7%, 1.9% ex autos. The rise was led by surging gasoline prices but sales ex autos and gasoline rose by a solid 0.6%. Later March pending home sales rose by 1.5% and February business inventories increased by 0.4%. Senate hearings for Fed Chair nominee Warsh took place. Warsh stated his support for Fed independence and denied that he had made commitments to lower rates to President Trump, though did suggest he would make significant changes to how the Fed operates.
USD/JPY rose to 159.50 from below 159. EUR/USD fell to 1.1730 from 1.1780. Despite continued pressure on UK PM Starmer, EUR/GBP edged below .87 from .8710. UK unemployment unexpectedly fell to 4.9% from 5.2%, but this was on fewer people seeking work and a GBP bounce on the data did not hold, the dip below .87 coming later. EUR/CHF was fairly stable. The USD managed only marginal gains versus AUD and CAD. Rising UST yields helped the USD to close strongly.