North American Summary and Highlights 14 May
Overview - The USD was weaker in the European morning but erased its losses in North America.
North American session
The USD reversed its European losses, led by rising UST yields. There was little news, other than a Bloomberg report that the US was not seeking to weaken the USD in trade negotiations, which saw USD/JPY briefly above 147. Elsewhere the USD fully erased European losses, EUR/USD falling to 1.1170, even with EUR/CHF and EUR/GBP firmer. The strongest USD gains came against the commodity currencies, USD/CAD rising to 1.3975 after bottoming near 1.39 and AUD/USD falling to .6425 after peaking near .65. Equities saw little movement.
European morning session
The USD fell back across the board through the European morning, with the JPY the best performer. USD/JPY dropped 110 pips to 145.90, while EUR/USD gained 60 pips to 1.1250. GBP/USD rose 40 pips to 1.3350, while the commodity currencies made more modest gains. Scandis and CHF were steady against the EUR.
There was no obvious rigger for USD losses, with no data of note. Final CPI data from Sweden, Germany and Spain was in line with preliminary estimates. The moves look to be unwinding of short-term long USD positions taken on the back of the recent positive trade news. Equity markets were mildly weaker and US yields lower.