North American Summary and Highlights 10 Apr

North American session

The US session saw the USD rally by around 1.0% on a stronger than expected US CPI, where both the headline and core rose by 0.4%, the latter the third straight 0.4% increase, though at 0.359% before rounding the difference from consensus was modest. Around half the FX move came in the knee-jerk reaction to the release which subsequently extended before stabilizing in the afternoon. FOMC minutes from March 20 had little impact, with respondents expecting inflation and growth to slow and outlining plans to slow the pace of balance sheet reduction. 

USD/JPY rose to near 153.00 from 151.85 and EUR/USD fell to 1.0740 from 1.0860. EUR saw modest gains versus GBP while seeing little direction versus the CHF. AUD/USD fell particularly sharply, to 0.65 from 0.6620. AUD/CAD fell to .89 from 0.8980, despite a BoC statement that sounded more optimistic on inflation while leaving rates unchanged. USD/CAD rose from 1.3565 to briefly touch 1.37. Most of the move was in response to the US CPI but CAD did extend losses after BoC Governor Macklem said a June rate cut was possible.

European morning session

European currencies gained a little ground through the European morning session, with GBP and SEK marginally the best performers. EUR/USD edged up around 10 pips, but GBP/USD gained 20 pips to 1.2695. USD/JPY was also slightly firmer, rising 10 pips to 151.85. 

Newswise, Norwegian CPI was the only significant data, showing a larger than expected decline in the core y/y rate to 4.5% in March from 4.9% in February. EUR/NOK initially blipped a couple of figure higher, but finished the session little changed at 11.58.