North American Summary and Highlights 4 Jun
Overview - The USD fell across the board on weak ADP employment and ISM services data.
North American session
The USD fell on weak US data, firstly a rise of only 37k in May’s ADP estimate of private sector employment, the weakest since March 2023, and then a fall in May’s ISM services index marginally below neutral at 49.9 from 51.6. UST yields were also lower but equities were resilient. There was no response to the Fed’s Beige Book reporting a slight decline in activity. USD/JPY fell below 143 from above 144 and EUR/USD rose to 1.1415 from 1.1385.
EUR/GBP was marginally firmer but EUR/CHF slipped to .9345 as EUR/JPY fell to near 163. There was little response to the Bank of Canada meeting which saw rates left unchanged waiting for more information, though Governor Macklem suggested rates could be eased in the future. USD/CAD slipped to 1.3675 from 1.37 on USD weakness, while AUD/USD gains from .6465 peaked near .65.
European morning session
The USD fell modestly through the European morning. EUR/USD gained 20 pips to 1.1390 and USD/JPY lost 10 pips to 144.10. AUD/USD rose 15 pips to 0.6475 and USD/CAD slipped 15 pips lower to 1.3710. There was a mild risk positive tone, with EUR/CHF up 15 pips to 0.9380.
The main news was the upward revision of European May PMI data, with higher service sector indices in both the Eurozone and the UK leading to a significant upward revision to the composite index. This triggered an extension of early USD weakness, but the post-data move was reversed by the end of the morning.