North American Summary and Highlights 2 July
Overview - The USD was weaker after Fed’s Powell expressed optimism that disinflation had resumed.
North American session
The USD slipped early in the North American session, the move extended by dovish-leaning comments from Fed’s Powell, who said that prices were showing signs of resuming disinflation, though more such data was needed. The reaction to Powell was however largely erased when May job openings showed an unexpected rise of 221k though this followed two straight declines of over 400k.
The afternoon saw the USD moving back to near the post-Powell lows, though USD/JPY was more resilient, settling in mid-range near 161.50. EUR/USD advanced to near 1.0750 while USD/CAD saw a particularly sharp fall to 1.3670. AUD/USD showed only modest gains to .6670. EUR advanced versus the CHF but slipped versus the GBP.
European morning session
The EUR fell back through the European morning, reversing all the gains seen after the French election on Monday. EUR/USD dropped 25 pips to 1.0710, while the USD was little changed against other European currencies, although USD/SEK was marginally higher. The AUD and CAD both gained a little ground against the USD. AUD/USD rising 10 pips to 0.6650, and USD/CAD dropping 20 pips to 1.3730. USD/JPY was little changed at 161.65.
There was little news of note with the final Eurozone CPI data coming in at 2.5% y/y as expected, although the core y/y was slightly above expectations at 2.9%.