North American Summary and Highlights 21 May
Overview - The USD was slightly weaker on a subdued day for FX, with the UST and equity markets both under pressure.
North American session
With Republicans struggling to reach agreement on fiscal policy, UST yields picked up sharply, the move accelerating after a weak 20-year auction, and this weighed on equities. FX moves were modest but the USD had a negative tone. After the weak auction EUR/USD again edged above 1.1360 and USD/JPY slipped below 143.50 but neither move was sustained. CAD was firmer as forecasts for a June BoC easing were reconsidered after Tuesday’s strong core CPI, USD/CAD slipping to 1.3850 from 1.3890 with AUD/CAD at .8915 from .8950.
European morning session
The main news of the European morning was a stronger than expected rise in the UK CPI to 3.5% from 2.6%. GBP/USD picked up to a high of 1.3469 from near 1.3430 but the move was later reversed. EUR/GBP showed only marginal losses which were more than fully reversed, with highs seen above .8450. EUR/USD advance from 1,.1365 to 1.1360. USD/JPY was unable to sustain a move back above 144.