North American Summary and Highlights 4 June
Overview - JPY strength, after comments from BoJ’s Himono, was the main story of the day.
North American session
The USD was generally slightly softer in North America, assisted by JOLTS data showing US job openings down by 296k to 8.059m in April. USD/JPY extended European losses to a low of 154.55 before correcting to 154.75 though AUD and CAD largely sustained European losses.
EUR/USD saw a modest recovery to 1.0880 from 1.0860. GBP/USD rose to near 1.28 after touching below 1.2750, before slipping back to 1.2775 leaving EUR/GBP little changed. EUR/CHF extended losses to .9680. EUR/NOK sustained European gains while EUR/SEK saw a partial correction from its European highs.
European morning session
JPY strength was the main feature of the European morning. USD/JPY fell more than a big figure to 155.15, and EUR/JPY fell nearly two big figure to 168.60. JPY strength was helped by comments from BoJ deputy governor Himono, who said the central bank must be "very vigilant" to the impact the yen's moves could have on the economy, suggesting the currency's weakness will be among factors affecting the timing of its next interest rate hike. These comments built on an early firm JPY tone, supported by the combination of lower yields in the US and Europe and softer equity markets.
The USD was generally firmer against the riskier currencies, underlining the “risk off” nature of the move. EUR/USD dropped nearly half a figure from 1.0910, and AUD/USD lost nearly 1% to 0.6635. The CHF also outperformed, with EUR/CHF falling to 0.9710 after opening at 0.9760. EUR/CHF initially rallied above .9770 after Swiss CPI came in on consensus at 0.3% m/m, but fell back as the general risk negative tone took hold. The risk off trade also put the scandisk under pressure, with EUR/NOK rising 10 figures to 11.50 and EUR/SEK 5 figures to 11.40.