North American Summary and Highlights 28 Mar

North American session

The USD lost some ground in North America, most notably versus the CAD as Canadian GDP exceeded expectations with a 0.6% increase in January, with a preliminary February estimate for another strong ruse, of 0.4%. USD/CAD fell from near 1.36 to a low of 1.3525 with a modest late correction. AUD/USD advanced from .6490 to .6515 leaving AUD/CAD fairly stable in North America if down on the day. 

EUR/USD saw an early bounce above 1.08 despite generally positive US data, which failed to hold, while USD/JPY reversed modest early slippage. Q4 US GDP was revised up to 3.4% from 3.2% with generally positive details though core PCE prices were revised down to 2.0% from 2.1%. Initial claims remained low at 210k. Later we saw a weak Chicago PMI of 41.4, a near consensus 1.6% rise in pending home sales and an upward revision to the Michigan CSI to 79.4, the highest since July 2021. Inflation expectations were however revised slightly lower. None of this had any significant FX impact.

European morning session

The USD was generally stronger through the European morning, with the AUD and EUR showing the clearest weakness. AUD/USD lost nearly 40 pips to 0.6490, while EUR/USD fell around 30 pips to 1.0790. USD gains elsewhere were more modest, with JPY, GBP, and CHF only marginally weaker, while USD/CAD gained around 15 pips to 1.3595. 

Newswise there was some weak German retail sales data early in the session, recording the fourth consecutive decline of 1.9% m/m in February, well below expectations. However, German unemployment rose slightly less than expected at 4k on the month in February, while Eurozone money data was much as expected. UK Q4 GDP data was unrevised at -0.3% q/q confirming the h2 recession, but EUR/GBP fell back 20 pips to 0.8550.