North American Summary and Highlights 6 May
Overview - The USD was generally weaker on Middle East peace hopes, but came off its lows in North America.
North American session
Hopes that Iran and the US were moving towards a deal persisted, though comments from Trump that Iran would face a new wave of bombing if it did not accept a deal did see the USD come off its lows. USD/JPY corrected to 156.40 from around 156 while EUR/USD moved back to 1.1750 after failing to break 1.18. EUR/GBP was slightly firmer but EUR/CHF slightly softer. USD/CAD advanced to 1.3640 from 1.36 while AUD/USD returned to 0.7240 after peaking near .7280.
April’s ADP employment report was slightly stronger than expected with a 109k increase. Fed’s Musalem stated that risk have been shifting towards the inflation side of the mandate.
European session
The USD was generally a little weaker through the European morning, with EUR/USD gaining around 40 pips to 1.1770, and most other European currencies seeing similar gains. The NOK was an exception, with EUR/NOK rising 9 figures to 10.91, and USD/NOK up 6 figures to 9.28, reflecting a drop in the oil price of around 8% due to optimism over a US/Iran deal. The SEK was also weaker, with EUR/SEK up 4 figures to 10.84.
USD/JPY was relatively stable following the volatility in late Asia after the supposed BoJ intervention, holding close to 156 for most of the session. Equites were generally much stronger, helped by the lower oil price and the better sentiment around the Middle East.