North American Summary and Highlights 4 Mar
Overview - The USD saw modest losses on hopes that the conflict in the Middle East could be resolved.
North American session
US data was on the strong side of expectations, with a 63k rise in February’s ADP employment report and more significantly a February ISM services index of 56.1 from 53.8 in January, though focus remained in the Middle East and market reaction was modest. Equites were firmer, with the S and P up around 1.0%. European USD losses were largely sustained with USD/JPY stable near 157 and EUR/USD stable near 1.1640. The commodity currencies picked up in the afternoon, AUD/USD to .7075 while USD/CSAD fell below 1.3650.
European morning session
The USD has sold off modestly in late morning Europe, on a NYT report that Iran had reached out to the CIA at the start of the week to discuss terms for ending the conflict – equities and government debt also bounced, with energy prices coming off mildly. Traders are not sure that talks will occur or will be serious until next week when missiles start to get depleted – the Hill separately reported that Trump administration officials are concerned about Iran’s drones. FX traders say some further trimming of USD longs could be seen if the reports are backed by further reports, but warn that an erratic Trump could reject talks at least for now.