North American Summary and Highlights 15 April
Overview - It was and day of limited FX movement, though EUR and CAD were softer after weak data.
North American session
Equities and most FX pairs saw little movement. Exceptions were a weaker EUR/USD, which slipped below 1.13, and a rise in USD/CAD to 1.3965 from 1.3875. The latter followed a weaker than expected March Canadian CPI of 2.3% yr/yr from 2.6% in February, increasing perceived risk of a BoC easing on Wednesday. Two dips in USD/JPY below 143 were erased.
US data showed a less weak April Empire State manufacturing index of -8.1 from -20.0, but 6-month expectations for activity turned negative and price indices accelerated in response to tariffs.
European morning session
EUR/USD fell slightly through the European morning, dipping around 20 pips to 1.1340, but GBP/USD gained 30 pips to 1.3240. EUR/GBP consequently fell 30 pips to 0.8565. This followed somewhat softer than expected UK labour market data, with the March flash payroll data showing the largest monthly decline in employment since the pandemic, while earnings data also weakened on both the HMRC and ONS measures. While this led to lower UK yields, GBP nevertheless gained ground as recent losses against the EUR have been risk rather than yield related, and the lower inflation risks suggested by the data support prospects for UK rate cuts and UK growth.
Otherwise, there was unsurprisingly a sharp fall in the German April ZEW index to its lowest since December 2022, but most currency pairs were fairly steady.