Europe Summary and Highlights 22 May
The USD fell back against the JPY early in the European morning, hitting a low at 142.80, but rebounded to finish the morning slightly higher at 143.45.
The USD fell back against the JPY early in the European morning, hitting a low at 142.80, but rebounded to finish the morning slightly higher at 143.45. EUR/USD started steady but fell back after weaker than expected May PMI data, slipping below 1.13 after opening at 1.1335. EUR/GBP also moved lower through the session, with UK composite PMI marginally above consensus. EUR/CHF edged lower to 0.9332 with the generally weaker EUR and a decline in equities after the PMIs, and AUD and CAD both fell against the USD as equities slipped lower.
The Eurozone composite PMI fell to 49.5 in May from 50.4 in April against a market consensus expectation of a rise to 50.7, with both services and manufacturing falling. The UK composite PMI rose to 49.4 from 48.5, driven by strength in services.
Asia session
The USD/JPY strengthened in early Asia, when headline crossed the wire that US Treasury Secretary Bessent met with Japan FM Kato. As Kato has previously stated that FX will be in discussion with his U.S. counterpart, market participants are envisioning the potential collaboration between the U.S. and Japan to support USD/JPY. However, the move was faded after Kato's remark that he agreed with Bessent that FX rates should be set by markets and no other comment for FX level, further confirmed by japan's vice FM Mimura. USD/JPY resumed downward traction and is trading 0.22% lower at 143.33 after fading the spike to 144.40.
Regional equities are soft on Thursday, mostly in the red with Chinese SSECI close to closing the down gap. U.S. three major equity indexes are doing slightly better, up an aver 0.1%, looks like a minimal bounce from the overnight drop. USD is trading broadly lower but magnitude is so far limited as major headlines were only reading JPY. AUD/USD is trading 0.17% higher at 0.6448, NZD/USD is down 0.26% to 0.5924 while US/CAD slips 0.05%. Else, EUR/USD is unchanged and GBP/USD is up 0.04%.