North American Summary and Highlights 12 Apr

North American session

The USD traded higher through the North American session, steadily against most currencies though USD/JPY saw an early slide to a low of 152.59 largely reversed, returning to around 153.25. Equity weakness was the focus given fears that Iran might shortly attack Israel, with additional anxiety over banking sector earnings. AUD/USD was particularly weak, falling to .6460, while USD/CAD rose to 1.3775. EUR/USD stabilized in the afternoon after reaching a low of 1.0623 while GBP/USD bottomed at 1.2427, as EUR/GBP reversed European losses.

News had little impact. April’s preliminary Michigan CSI dipped to 77.9 from 79.4 but the 5-10 year inflation view rose to 3.0% from 2.8%. The most notable Fed speaker was probably Schmid, who sounded quite hawkish suggesting rates would stay higher for longer. Collins, Goolsbee, Bostic and Daly also spoke, but their tone was similar to their recent comments, also with few dovish signals.

European morning session

The EUR fell back across the board through the European morning, with EUR/USD losing half a figure to trade at new lows for the year below 1.0660. There was no obvious cause of EUR weakness, but EUR yields were lower as markets reassessed Thursday’s ECB and once again priced in a June ECB cut as a near 80% chance. The USD was also generally firmer elsewhere, with USD/JPY gaining 10 pips to 153.30, after reaching a new 34 year high at 153.38, and GBP/USD dropping 40 pips to trade below 1.25, also a new low for the year. 

The SEK was the weakest currency on the day, with EUR/SEK gaining a couple of figures after weaker than expected Swedish CPI data for March, with the core rate falling to 2.2% from 2.5% in February. GBP gains against the EUR were supported by stronger than expected UK GDP data. The February GDP rise of 0.1% was as expected, but January was revised up to 0.3% and the 3m/3m trend rose to 0.2%, the highest since October. EUR/GBP was down 15 pips to 0.8530.