North American Summary and Highlights 6 May
Overview - The USD was generally weaker, with losses becoming broader based in North American trade.
North American session
The USD maintained a weaker tone in North America, the move assisted by a dip in UST yields after a successful 10-year auction. GBP/USD gains stalled once 1.34 was reached, but USD/JPY fell below 142.50. EUR/USD advanced to 1.1375 assisted by CDU leader Merz being elected Chancellor at the second attempt. EUR/GBP reversed most of its European losses to return to .85, while EUR/CHF remained firm near .9350.
With oil firmer the commodity currencies advanced, AUD/USD reaching .65 and USD/CAD falling to 1.3765, a meeting between Trump and Canadian PM Carney seeing disagreements, but causing no real alarm. Earlier the US recorded a record trade deficit of $140.5bn, even wider than expected, as falling service exports added to a surge in goods imports ahead of the April 2 tariff announcement.
European morning session
The USD was mixed through the European morning, falling back against the JPY but gaining slightly against most of the riskier currencies. However, GBP bucked that trend, with GBP/USD gaining around 20 pips on the session, while EUR/USD fell back 10 pips to 1.1310. AUD/USD also around 10 pips to 0.6445. USD/JPY lost half a figure to 143.25.
The CHF was the weakest currency on the morning, reacting to the comments from SNB resident Schlegel, who noted that the CHF had strengthened a lot and indicated that intervention and a rate cut to zero or negative remained possible. EUR/CHF gained 30 pips to 0.9345. The EUR made some gains early in the session but fell back after CDU leader failed to win the majority required to be elected Chancellor. This was seen as likely to be a temporary setback, but nevertheless pushed German stocks and the EUR lower.