North American Summary and Highlights 20 Jun

North American session

Despite a weaker than expected Philly Fed manufacturing index, unchanged at -4, and dovish comments from Fed’s Waller who said easing in July was possible, the USD made gains early in North America, with focus on the Middle East. USD/JPY saw particularly strong gains, testing 146 from 145.30. However, a dip in EUR/USD below 1.15 was quickly reversed, and a rebound to 1.1530 was seen. EUR/CHF at .9420 and EUR/GBP at .8560 were also firmer, while EUR/JPY rallied comfortably above 168. 

Equities saw modest losses while UST yields reversed early gains even with Fed’s Barkin contrasting Waller’s tone seeing no rush to ease given tariff risks to inflation. Oil was slightly softer. AUD/USD slipped to .4660 from .6490 while USD/CAD rose to 1.3725 from 1.3690. April Canadian retail sales were resilient with a 0.3% increase but May saw a preliminary estimate for a 1.1% decline.  

European morning session 

There was little FX movement in the European morning. GBP/USD slipped to from near 1.35 on a 2.7% decline in May UK retail sales but the dip was largely erased by the end of the morning. A bounce in EUR/GBP above .8550 was also erased as EUR/USD kept to a narrow range around 1.1520. USD/JPY also kept a tight range, near 145.35.  AUD and CAD, like the GBP, erased modest dips versus the USD.