North American Summary and Highlights 27 May
Overview - The USD was slightly firmer after the White House denied an Iranian report of a memo of understanding to reopen the Strait of Hormuz.
North American session
The USD saw an early dip after Iran claimed a memorandum of understanding had been reached with the US over opening the Start of Hormuz, though this was later reversed and more as the White Hose described the report as a complete fabrication, leaving the USD slightly higher. After dipping to near 159.30 USD/JPY advanced above 159.50. EUR/USD fell to 1.1630 after bouncing above 1.1650. EUR/JPY and EUR/GBP were little changed but EUR/CHF was firm at .9150. USD/CAD and AUD/USD saw little movement.
European session
Morning action mainly focused on some position adjustments on the popular cross trades, taking its cue both from overnight action and from the (so far) stickiness of the pullback in oil prices.
Out of the RBNZ, AUD/NZD extended the pullback back to 1.2135/15 recent lows support, which stands in the way of stronger 1.2050/00 support area. While the RBNZ in one sense only adjusted its OCR projection to nearer market existing expectations, the cross is a well populated trade that had run up even further into the meeting. Along with the oil pullback, that gave a good positional cue to some pullback action.
It’s a similar story for NOK, the other main mover of the morning, NOK/SEK around – ¾ %, and EUR/NOK + ½ %. NOK has been another popular thematic cross trade and with Brent holding onto the lower levels as talks continue despite all the recent concerns and strains on the deal talks (Brent front month -3.5% to $96~), that’s encouraging in some near-term profit-taking interest. NOK/SEK back below its recent MA trend and 1~ figure also helping the move, 0.9950~ lows, ahead of 0.99 and 0.9860/00.
EUR/USD +0.15%, finding the 1.1640/50 area magnetic ahead of expiries.