North American Summary and Highlights 19 Mar
Overview - USD/JPY extended its post-BoJ loses but USD gains elsewhere were largely erased.
North American session
The JPY continued to weaken, with USD/JPY gaining another half a figure through the North American session to near 151, while the USD otherwise generally edged lower, with EUR/USD rising 20 pips to 1.0865. USD/CAD initially rose strongly after weaker than expected Canadian CPI data to trade above 1.36, but reversed gains by the European close, trading back around North American opening levels at 1.3560. The CHF also lost a little ground against the EUR, with EUR/CHF rising 20 pips to 0.9645, but was little changed against the USD.
February’s Canadian CPI saw an unexpected fall to 2.8% yr/yr from 2.9% in January and 3.4% in December, putting the series at its lowest since March 2021. February US housing starts saw a stronger than expected 10.7% increase to 1521k though have still not fully reversed January’s 12.3% decline, which was hit by weather. Permits were also stronger than expected, up a modest 1.9% to 1518k after a 0.3% decline in January.
European morning session
The JPY continued to weaken through the European morning, following the decline seen after the BoJ decision. USD/JPY opened around 150.30 but traded up to 150.70 before edging back to 150.50. The USD was generally firmer. EUR/USD dropped 20 pips to 1.0845, and AUD/USD lost around 10 pips to 0.6510 following the overnight decline. EUR crosses were mostly not much changed, although EUR/CHF moved modestly lower and EUR/SEK made gains early in the session, although these were reversed by the end of the morning.
There wasn’t much news, but the German ZEW data came in on the strong side of expectations, with the forward sentiment indicator particularly strong, reaching its highest for 2 years. Eurozone Q4 wage data showed a sharp decline to 3.1% y/y, supporting the case for earlier ECB easing.