North American Summary and Highlights 30 May

North American session

The USD extended European losses in North America, with US data coming in on the soft side. Q1 GDP was revised down to 1.3% from 1.6% as expected, the revisions led by consumer spending which was revised to2.0% from 2.5%, while cote PCE prices saw a marginal downward revision to 3.6% from 3.7%. Initial claims saw a marginal rise to 219k from 216k but the big surprise was a wider advance goods trade deficit fir April, of $99.4bn versus $92.3bn in March, which adds to risk of another subdued quarter from GDP in Q2. Later April pending home sales reported a sharp 7.7% decline.

EUR/USD advanced to 1.0835 from 1.0815 ahead of the data while GBP/USD rose to 1.2735 from 1.2710. USD/CAD fell to 1.3680 from 1.3710 while AUD/USD rose to .6635 from .6620. USD/JPY was relatively resilient, moving slightly above pre-data levels to around 156.80 with only a brief dip. EUR/CHF and EUR/SEK extended European losses, falling below .98 and 11.50 respectively. 

European morning session

The USD was generally lower through the European morning, losing around 0.1-0.2% against the majors. EUR/USD rallied to 1.0810 after dropping below 1.08 in Asia, while USD/JPY continued the softer tone seen in Asia, slipping below 157. 

The CHF was the best performer, with EUR/CHF dropping half a figure to 0.9810 after stronger than expected Swiss Q1 GDP data, which showed a 0.5% q/q gain against a consensus of 0.3%. The SEK also performed well, with EUR/SEK falling 4 figures to 11.50 after Swedish Q1 GDP rose a much larger than expected 0.7% q/q, although the impact was reduced because 0.5% of the rise was due to inventories. 

Other data saw an EU Commission survey that was much as expected, with no major change in the confidence indices, although the business climate index did improve. Spanish CPI also came in in line with expectations at 0.2% m/m on an HICP basis.