Europe Summary and Highlights 7 May

European morning session

The USD was generally a little weaker through the European morning, with EUR/USD gaining around 20 pips to 1.1770, and most other European currencies seeing similar gains. The NOK was the best performer, with EUR/NOK dropping 9 figures to 10.85, erasing most of yesterday’s losses as Norges Bank raised the policy rate to 4.25%. The decision had been seen as a close call ahead of time. The Riksbank left policy unchanged as expected, but the SEK gained a little against the EUR in sympathy with the NOK. The JPY initially gained some ground against the USD as well, but fell back to opening levels by the end of the session.

Datawise, German march industrial orders rose a strong 5% m/m, but the data has been volatile of late and the rise had no market impact. The UK construction PMI for April came in weaker than expected at a 6 month low, but GBP only edged very slightly lower against the EUR.

Asia session

All eyes will be on Iran's response for U.S. war ending peace proposal. Market participants have been looking at the bright side but results could be polarized. It is also reported earlier that Saudi Arabia has banned the U.S. using its aircraft base for Project Freedom, leading to Trump pausing the operation. U.S. major equity indexes are performing individually while precious metal gains. AUD/USD is trading 0.18% higher at 0.7250. NZD/USD is trading 0.14% higher while USD/CAD is unchanged with oil slightly lower.

There is no actual intervention on Thursday, but verbal ones. It is nothing special and does not indicate imminent physical intervention. The Japanese market end and see JGB yields lower. USD/JPY is trading 0.02% higher at 156.36. Else, EUR/USD is up 0.04% and GBP/USD is up 0.03%.