Europe Summary and Highlights 6 May
The USD was mixed through the European morning, falling back against the JPY but gaining slightly against most of the riskier currencies.
European morning session
The USD was mixed through the European morning, falling back against the JPY but gaining slightly against most of the riskier currencies. However, GBP bucked that trend, with GBP/USD gaining around 20 pips on the session, while EUR/USD fell back 10 pips to 1.1310. AUD/USD also around 10 pips to 0.6445. USD/JPY lost half a figure to 143.25.
The CHF was the weakest currency on the morning, reacting to the comments from SNB resident Schlegel, who noted that the CHF had strengthened a lot and indicated that intervention and a rate cut to zero or negative remained possible. EUR/CHF gained 30 pips to 0.9345. The EUR made some gains early in the session but fell back after CDU leader failed to win the majority required to be elected Chancellor. This was seen as likely to be a temporary setback, but nevertheless pushed German stocks and the EUR lower.
Datawise there was a modest upward revision to Eurozone composite PMI, and Eurozone PPI was slightly weaker than expected at 1.9% y/y.
Asian session
USD/JPY tried to retest the 144 figure in early Asia but back off on the first try as USD strength fades on Tuesday's Asia session. The high reached is 144.27, before retracing gains to currently trading 0.03% higher at 143.72, seems to be weighing down by the soft U.S. equities.
The regional equity market is upbeat on Tuesday with the Chinese equity indexes reopened higher after the May 1 Golden Week. U.S. equities, on the other hand, are weighed by Trump's latest idea of pharmaceutical tariffs. AUD/USD has a up and down session along with broad USD movement, currently trading at 0.6468, NZD/USD is up 0.27% at 0.5983 while USD/CAD slips 0.06%. It is reported that Carney will be talking with Trump in the U.S. session and could bring significant volatility in USD/CAD. Else, EUR/USD is up 0.09% and GBP/USD up 0.04%.