North American Summary and Highlights 26 Apr

North American session

While March US core PCE price index provided modest relief in rising by an as expected 0.3%, the USD traded higher in North America. USD/JPY led the way, rising by around a big figure to near 157.80 with no significant correction from its high. Elsewhere the USD moved off its highs to record only modest gains, EUR/USD setting in mid-range near 1.07 after bottoming at 1.0674. Other pairs showed similar moves, GBP/USD slightly outperforming EUR/USD as EUR/GBP slipped to .8560.

US March personal income rose by an as expected 0.5% while spending exceeded consensus with a 0.8% increase, though we had already seen Q1 totals in the GDP breakdown. April’s final Michigan CI saw only a marginal revision, down to 77.2 from 77.9. 

European morning session

USD/JPY initially edged higher in the European morning, following the trend seen in Asia after the BoJ meeting. But at 9 am London time USD/JPY fell 170 pips in 3 minutes, leading some to suspect BoJ intervention. But there was no confirmation from the Japanese authorities, and the move may not have been due to any official action, but rather a market driven short squeeze. Either way, USD/JPY recovered back to 156.65 by the end of the morning, less than 20 pips off the 156.84 34 year high made at 08:30 London time. 

EUR/USD showed a slightly firmer tone, rising to a high of 1.0753 from an open around 1.0725, helped by the stronger than expected Eurozone M3 data, which showed a 0.9% rise in the month in March. However, household and business loan growth remained weak, and money growth is still also at historically low levels, so the data us unlikely to impact ECB thinking. Nevertheless, EUR/USD held slightly higher levels, trading near 1.0735 at the end of the morning. The EUR also traded higher against the scandisk, but was steady against GBP and AUD.