North American Summary and Highlights 23 May
Overview - The EUR was supported by stronger PMI data but the USD ended with broad based gains after US PMI data also exceeded expectations.
North American session
The USD spiked higher on stronger than expected S and P PMI data, most notably services which rose to a 12-month high of 54.8 from 51.3 while manufacturing picked up to 50.0 from 50.0. USD/JPY spiked from 156.70 to a high of 157.20 before moving back below 157 as equities came under pressure. Elsewhere USD losses accelerated, particularly in the riskier currencies, AUD/USD falling to .66 from .6650 and USD/CAD up to 1.3735 from 1.3660. EUR/USD fell to near 1.08 from 1.0860. GBP/USD moved below 1.27 with EUR/GBP little changed but EUR/CHF slipped to .9885 from .9910.
Other US data had little impact. Initial claims fell to 215k from 223k suggesting a still firm labor market but new home sales fell by 4.7% to 634k.
European morning session
EUR/USD gained around 15 pips to 1.0845 in the European morning helped by slightly better than expected Eurozone PMI data. This showed a further rise in the composite index in May, due to a strong rise in the manufacturing index and despite a slight decline in the services index. The EUR also gained ground against GBP, with EUR/GBP rising to 0.8520 from an open near 0.85 as the UK PMI index disappointed. While the UK manufacturing index also rose, the services index fell more sharply, and the composite index was consequently lower on the month.
The AUD also managed gains through the morning, with AUD/USD rising around 10 pips after overnight weakness, and USD/CAD was also softer, while USD/JPY was not much changed.