North American Summary and Highlights 12 Mar
Overview - Comments from Iran and Trump added to Middle East worries, lifting both oil and the USD.
European and North American sessions
While the USD saw a modest dip in the European morning, it rebounded in North America with Middle East tensions escalating, with oil also firmer. The most significant comments came from Iran’s Khamenei who stated that the Strait of Hormuz would remain closed. Comments from Trump that stopping Iran was more important than high oil prices also suggested no imminent end to the war.
USD/JPY rallied to 159.40, more than fully erasing a dip to 158.57, while EUR/USD fell to 1.1515, more than fully erasing earlier gains to 1.1575. EUR/GBP was little changed but EUR/CHF advanced to .9045 from .9025. USD/CAD rose to 1.3625 from 1.3585 while AUD/USD fell .7080 from .7140.
US data was on the firm side, most notably a fall in January’s trade deficit to $54.5bn from $72.9bn, led by firmer exports. Initial claims remain low at 213k from 214k. January housing starts rose by 7.2% while permits fell by 5.4%, but the single family sector saw modest losses in both series.