European Summary and Highlights 26 June
The USD traded generally firmer through the European morning, rising around 0.15% across the board.
European morning session
The USD traded generally firmer through the European morning, rising around 0.15% across the board. While USD gains were similar across currencies, the USD/JPY gains were most significant, as we saw a print above 160 for the first time since the round of intervention on April 29. The precise high on April 29 is unclear, but it was the highest since April 1990, and a break above 160.35 would be the highest since December 1986. Of course, in real terms USD/JPY is already at all time highs.
EUR/USD dropped a little below 1.0690, and the CHF was the weakest currency on the morning, with USD/CHF gaining 25 pips to 0.8975. There was little data of note. The German Gfk July consumer climate index was a little weaker than expected, but is still consistent with a broad uptrend this year.
Asia session
The May Australian monthly CPI has come in hotter than expected at 4%, up 0.4% from 3.6% in April. This confirms RBA's remark in the last meeting, suggesting the overall pace of CPI moderation is not only slower than estimated but also rebounding higher in the past month and expected to remain high on energy prices and the end of rebate. However, there is little market participant anticipating any easing in 2024 and the Australian economy does not allow much room for further tightening. Thus, any CPI led spike would likely be short lived. AUD/USD is trading 0.44% higher at 0.6676 despite risk sentiment mixed, NZD/USD diverged and slipped 0.11% to 0.6114 on broadly stronger USD while USD/CAD is unchanged.
With little on the news front, USD/JPY is again grinding towards 160. We had not hear much from Japanese officials on Wednesday, maybe they are aware of the ineffectiveness or maybe they are letting the silence speak. It is worth mentioning that the last intervention at sub 160 level was not previewed by verbal intervention yet that day being a Japanese holiday could be a cause. U.S. Treasury Yields are performing individually while 10yr JGB rose above 1%. USD/JPY is trading 0.08% higher at 159.8 with session high at 159.9. Else, EUR/USD is down 0.04% and GBP/USD is unchanged.