North American Summary and Highlights 20 May

North American session

The USD saw some early gains but ended up slightly weaker in a session with little fresh news. The UST curve steepened and equities weakened. USD/JPY returned to 144.50 after rising to 145 while EUR/USD managed a marginal fresh high for the day at 1.1280. EUR/GBP was slightly higher but EUR/CHF moved lower as USD/CHF fell below .83 from .8350.  

The only significant data release was Canadian CPI. The headline slowed to 1.7% from 2.3% on the abolition of a carbon tax but the BoC’s core rates were the highest in over a year. USD/CAD slipped on the data to near 1.3920 and while that move was reversed later returned to near the lows. AUD/USD found support after touching below .64 and slippage in AUD/CAD on the data was reversed.  

European morning session 

The USD was net little changed in the European morning, although it did dip in the early part of the session, with EUR/USD reaching a high of 1.1278 and USD/JPY seeing a low of 144.09 before the USD recovered back to opening levels near 1.1255 and 144.50. There was a small decline in USD/CAD to 1.3935 and EUR/NOK to 11.57 from 11.59, but otherwise there wasn’t much change in G10 rates.   

Datawise German PPI was weaker than expected at 0.6% in April, and the Eurozone current account rose to a near record 50.9bn surplus in March, but this was expected after the trade data already released and looks to be related to the timing of (mainly pharma) exports due to tariffs. Comments from the UK MPC chief economist Pill were hawkish, but unsurprising as he voted against the last rate cut.