North American Summary and Highlights 29 Apr
Overview - The USD advanced as oil reflected increasing Middle East risk, with the move modestly extending after the FOMC meeting. The CAD was relatively resilient after the BoC meeting.
European and North American sessions
With Middle East risk lifting oil prices, the USD was firmer ahead of the FOMC, gaining momentum in the North American morning. US trade, durable goods orders, housing starts and permits data were mixed but on balance solid. USD/JPY pushed above 160 and EUR/USD nudged below 1.17. EUR/JPY gains peaked near 187.50. AUD/USD was also weaker but a bounce in USD/CAD above 1.37 was erased through the BoC press conference, which left open the possibility of tightening if higher oil prices were sustained, after the BoC left rates unchanged and saw policy as appropriate if BoC assumptions on oil prices falling and tariff rates remaining unchanged held up. AUD/CAD slipped to .9750 from .98. Movements in EUR/GBP and EUR/CHF were marginal.
The FOMC left rates unchanged as expected but there were three hawkish dissents against an easing bias in additional to one dovish dissent calling for an ease. Powell at his press conference suggested the language could be shifted at a future meeting, as well as stating he would continue as Governor after his term as Chair ends. The FX reaction was modest, but the USD advanced further, EUR/USD falling to 1.1680 and USD/JPY near 160.40.