North American Summary and Highlights 15 May
Overview - The USD was weaker in Europe, USD/JPY leading, and saw broader based losses in North America after softer than expected US CPI and retail sales data.
North American session
The USD slipped on the US data. CPI rose by a lower than expected 0.3% overall with the core rate while on consensus at 0.3% up by 0.29% before rounding. Retail sales were also weaker than expected, unchanged overall with negative back revisions, with a 0.2% rise ex autos but a 0.1% decline ex autos and gasoline.
There was some volatility with the initial knee-jerk USD fall being fully reversed, but USD slippage subsequently resumed to reach fresh lows. USD/JPY fell by 60 pips to 155 and EUR/USD rose by 50 pips to 1.0880. In a risk on environment EUR/GBP fell 20 pips to .8580 and EUR/CHF rose by 20 pips to .9820. AUD was bid, AUD/USD getting close to .67 and AUD/CAD reaching .91.
Other US data was also on the weak side of consensus, the Empire State manufacturing survey falling to -15.6 from -14.3 and later the NAHB homebuilders’ index falling significantly to 45 from 51.
European morning sessionUSD/JPY dropped around 60 pips through the European morning, falling back from the 156.40 area at the open, and GBP almost kept pace with JPY strength, with GBP/USD gaining 30 pips to 1.2625. EUR/USD and AUD/USD were little changed, while USD/CAD dropped 10 pips to 1.3630. The NOK also managed some gains, with EUR/NOK dropping 4 figures to 11.64.
EUR/SEK started the session slightly firmer after slightly weaker than expected Swedish April CPI data, which saw CPI drop to 3.9% y/y against a market consensus of 4.0%, with the core also slightly softer than expected at 2.3% y/y. EUR/SEK traded close to 11.70 but dropped back to 11.68 by the end of the session. Eurozone GDP and employment data for Q1 were both as expected, rising 0.3% q/q.