North American Summary and Highlights 4 May
Overview - The USD picked up on escalating tensions in the Middle East.
European and North American sessions
Tensions escalated in the Middle East as the US Project Freedom to protect navigation through the Strait of Hormuz meeting Iranian resistance, with Iran striking a South Korean ship and targets in the UAE, and the US claiming to have sunk several Iranian boats. This saw stocks slipping and the USD stronger. USD/JPY, having slipped below 156 in Asia, returned to near 157, while EUR/USD slipped to 1.17 from 1.1720. EUR/GBP and EUR/CHF made only marginal gains. USD/CAD rose to 1.3610 from 1.359o and AUD/USD fell to .7170 from .72.
A 1.5% rise in March US factory orders was stronger than expected with non-durables inflated by higher energy prices. Comments from Fed’s Williams were moderate, suggesting no eagerness to tighten.