North American Summary and Highlights 12 Mar

North American session

The USD gained some ground in the North American session, after US February CPI came in a little above expectations at 0.4% m/m for both headline and core. The initial knee-jerk USD bounce faded perhaps because the core rise was only just 0.4% (0.358 unrounded), but the USD strength soon resumed before partially and gradually unwinding in the afternoon. 

USD/JPY could not quite regain its knee-jerk highs above 148 but EUR/USD slipped to a low just above 1.09 before gradually retracing around half its losses. GBP/USD after slipping from near 1.28 to touch below 1.2750 erased nearly all of its losses. The USD ended around 0.1% higher overall.

European morning session

GBP fell back in the European morning, undermined by weaker than expected UK labour market data. The data showed average earnings growth falling back to 5.6% y/y in the 3 months to January, according to the official ONS data, while the more up to date HMRC data showed a decline to 5.5% y/y in February. Employment data was also weaker than expected, with the ONS data showing a 21k decline in employment in the 3 month to January. EUR/GBP rose to 0.8545 from an open around 0.8530. 

Otherwise, the market was fairly quiet, with EUR/USD dipping briefly but finishing the session little change at 1.0935, while USD/JPY edged marginally lower to 147.35. EUR/SEK moved 3 figures lower following the release of an unchanged Swedish unemployment rate of 6.8% early in the session, although EUR/CHF also slipped a little lower to 0.9580.