North American Summary and Highlights 24 May
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Overview - The USD slipped on Friday with lower Michigan CSI inflation expectations helping to fuel the move.
North American session
The slipped steadily through the North American session, the move gaining some momentum on the final May Michigan CSI release. While the index was revised up to 69.1 from 67.4, markets focused on downward revisions to inflation expectations, the 1-year view to 3.3% from 3.5% and the 5-10 year view to 3.0% from 3.1%. Earlier a stronger than expected April durable goods orders gain of 0.7%, 0.4% ex transport, was ignored.
EUR/USD saw modest gains to 1.0850, the EUR slipping versus the GBP but holding firm versus the CHF. USD/JPY slipped from a little above 157 to a little below before settling near the figure. CAD was particularly firm, USD/CAD slipping to 1.3670 from 1.3720. This was despite a weaker than expected 0.2% decline in March Canadian retail sales, which included an estimate for a 0.7% increase in April. AUD/USD extended gains to .6630.
European morning session
In a quiet European morning, EUR/USD gained 20 pips to 1.0830, USD/JPY slipped 10 pips to 157, EUR/CHF gained around 15 pips to test the recent highs, and EUR/NOK fell 4 figures to its lowest since March near 11.50. AUD, CAD and GBP moved higher with EUR .
UK April retail sales data was much weaker than expected, falling 2.3% m/m, and initially triggered a quick EUR/GBP gain of around 10 pips, but this was short lived and EUR/GBP finished the session just a few pips higher. While weaker than expected, the data is choppy and often seasonally distorted, so one month’s data is not seen as a clear guide. Otherwise there wasn’t much news of note, with the French business survey showing a small deterioration and German Q1 GDP confirmed at 0.2% q/q.