North American Summary and Highlights 20 March
Overview - The USD was generally stronger in Europe but stabilized in North America.
North American session
GBP/USD saw a marginal bounce on an 8-1 BoE vote for no change, with only one dissenting dive rather than two, but with the statement fairly neutral the bounced was quickly erased and GBP/USD stabilized near pre-meeting levels around 1.2960. EUR/USD was also little changed, after recovering from a dip to 1.0825 and returning to 1.0850. AUD/USD was also quiet, but edged up to 0.63.
US data saw a modest rise in initial claims to 223k from 221k, and a modest dip in the Philly Fed manufacturing survey to 12.5 from 18.1, but these are still healthy levels. Later an unexpected 4.2% rise in existing home sales was seen. Equities recovered from an early dip but tuned negative in the afternoon. USD/JPY saw modest early gains but stalled ahead of 149. USD/CAD slipped to 1.4315 after an early advance to 1.44, the bulk of the movement coming before BoC Governor Macklem stated that policy would have to be less forward looking due to heightened uncertainty.
European morning session
The USD was generally stronger in a more risk negative market in Europe. EUR/USD lost half a figure to 1.0845, and AUD/USD also lost half a figure to 0.6288. Most European currencies moved with the EUR, but GBP gained a little ground with EUR/GBP falling 10 pips to 0.8375 following the UK labour market data. This was mixed, with some evidence of weakening wage growth in the latest HMRC data, but employment data on the strong side of expectations.
Otherwise, the SNB cut their policy rate by 25bps to 0.25% as most had expected. This triggered EUR/CHF gains of around 40 pips to a high of 0.9580, settling back to 0.9570. Some of the gains reversed earlier losses, so EUR/CHF was only up around 20 pips on the session.
The Riksbank left rates unchanged as expected. EUR/SEK rose 3 figures on the session to 11.04, probably more due to the risk negative tone than the Riksbank decision.
USD/JPY was also slightly higher on the session, gaining 20 pips to 148.60, but the JPY ground on the crosses.