North American Summary and Highlights 12 July
Overview - The USD was softer after mixed US PPI data, particularly versus the JPY.
North American session
US June PPI delivered mixed data, a moderate 0.2% rise overall, a strong 0.4% rise ex food and energy, but a flat outcome ex food energy and trade, though with upward revisions to May the net data was stronger than expected. However the USD bounce on the data was brief and the USD ended weaker.
The sharpest move was on USD/JPY, with BoJ action suspected rather than confirmed, which saw a low below 157.50 and ended below 158. EUR/USD nudged above 1.09 while GBP/USD and AUD/USD gains stalled just below 1.30 and 0.68 respectively. USD/CAD was little changed while EUR/CHF was firm moving back above .9750.
Weaker preliminary July Michigan CSI data at 66.0 from 68.2 with inflation expectations, both 1-year and on a 5-10 year view, at 2.9% from 3.0% helped to sustain a softer USD tone.
European morning session
The USD was generally a little weaker against the riskier currencies through the European morning, with GBP the best performer. GBP/USD rose 40 pips to 1.2950, while EUR/USD gained around 20 pips to 1.0885, putting EUR/GBP just above the 0.84 level. There were also modest gains for AUD and CAD, but USD/JPY rose marginally to 159.15, and USD/CHF was not much changed.
The SEK fell back through the session as Swedish June CPI data came in weaker than expected at 2.6% headline and 1.3% core, against 2.8% and 1.6% expected. EUR/SEK rose 4 figures to 11.47, although this was still quite a modest move compared to the sharp NOK decline after similarly weak Norwegian data on Wednesday. Spanish and French final June CPI data were both revised slightly higher to 0.4% and 0.2% m/m respectively.