North American Summary and Highlights 12 May
Overview - The USD rose across the board after the US and China agreed to substantially cut tariffs on each other.
North American session
The USD marginally extended its strong European gains seen on the US-China trade deal in a session with few fresh trading triggers, comments from Treasury Secretary Bessent and later Trump having little impact. USD/JPY and ERIR/USD saw modest movement, settling a little above 148 and near 1.11 respectively. EUR/GBP slipped, but held above .84. Oil came off its highs, and the commodity currencies slipped despite equity strength, USD/CAD peaking above 1.40 before a late correction and AUD/USD slipping to .6370 from .6390.
European morning session
The USD gained ground across the board through the European morning, showing particular strength against the JPY and CHF as the US announced a trade deal with China with a reduction in reciprocal tariffs to 10% with other measures postponed for 90 days. Though the U.S. is still imposing an extra 20% due to fentanyl, China will likely make some moves that could also help to reduce this. The news triggered general gains in riskier assets, with S&P futures gaining 1.2% in the morning, adding onto the 1.5% gain seen in Asia.
USD/JPY gained 2 big figures to trade above 148, and USD/CHF gained a big figure to 0.8445. EUR/USD was also a big figure lower at 1.1115. The commodity currencies slightly outperformed, notably USD/CAD which only rose half a figure to 1.3970, while AUD/USD dropped half a figure to 0.64. GBP also outperformed, with EUR/GBP down 25pips to 0.8425. The NOK was the best performer of the European currencies, with USD/NOK little changed.