North American Summary and Highlights 11 July

North American session

US CPI came in weaker than expected at -0.1% with the ex food and energy rate up only 0.1% and 0.065% before rounding. The USD fell sharply on the release most notably USD/JPY which plunged to a low of 157.44 from around 161.60 and remained below 159 even as the USD moved off its lows. EUR/USD saw a high of 1.09 from 1.0845 ahead of the data but drifted back to 1.0865. EUR slipped marginally versus the GBP while EUR/CHF slipped as low as .9710 from .9750, but erased most of its losses in late trade.

Equities slipped putting pressure on the commodity currencies. AUD/USD and USD/CAD both ended little changed with the latter fully erasing its reaction to the US data, AUD/USD finding sellers at .68.

Initial claims were overshadowed by the CPI but were lower than expected at 222k from 239k. Later in the session Fed’s Muslaem and Daly welcomed the CPI but gave no hints that a near term easing was being considered. 

European morning session

The USD was generally a little weaker through the European morning, losing around 0.1% across the board. GBP was slightly the best performer, with EUR/GBP dipping to a low just above 0.8420 after this morning’s stronger than expected May GDP data. This showed a 0.4% rise against a market consensus of 0.2%, due to strength in services and construction. However, the GBP gains against the EUR were quite small, only slightly extending yesterday’s gains after the comments from BoE chief economist Pill. 

The big mover through the morning was EUR/NOK, which gained 10 figures to 11.70, without any obvious cause beyond an extension of the upmove seen on Wednesday following the weaker than expected Norwegian June CPI data.