North American Summary and Highlights 26 June
Overview - The USD stabilized after a wider US trade deficit initially extended its correction lower.
North American session
The USD saw a dip on a much wider than expected advance US goods trade deficit for May of $105.8bn versus $83.0bn in May, but eventually the USD recovered to end moderately stronger. Fed’s Kashkari suggested the Fed may need to raise rates on high inflation, while Trump threatened a 100% tariff on nations imposing Digital Services Taxes.
EUR/USD slipped back below 1.40 after a bounce above, while USD/JPY edged up to 161.75 from 161.60. A spike in EUR/GBP was also reversed while EUR/CHF was stable. USD/CAD made modest gains but could not break 1.42. AUD/USD remained close to .69, but ended marginally below.
European session
Into the end of the week, corrective consolidation action predominating as the market unwinds overbought conditions on the dollar. EUR/USD is pulling back to test the previous 1.14/10 break. USD/CHF likewise eases back from the 0.81/25 high test through earlier in the week.
NOK remains pressured though, if also slowed - USD/NOK nudges a new high, albeit the last couple of sessions have been a bit more sideways and overlapping. Oil drops back to the lows after yesterday’s small bounce, -$2 ½ on the day.
Risk market remain whippier and overall weighed, Nasdaq future currently off around 1%. Nikkei posting -4% and Kospi -5% overnight showing how a lot more daily volatility has entered the system this week. To be seen if that translates into some spec dial back and so fuller price correction, or this is just heralding a period of wider, noisier, action.