North American Summary and Highlights 8 Apr
Overview - The USD was softer on the Middle East cease fire, but doubts over whether it would last built in the North American afternoon.
North American session
The USD maintained its Asian losses seen on the two-week ceasefire plan for the Middle East in Europe, and these were extended in early North America with USD/JPY slipping below 158 and EUR/USD moving above 1.17. However late in the day the USD saw a partial recovery, with Iran stating the ceasefire had been violated. A key disagreement was whether the ceasefire included Lebanon, where Israeli military action escalated, while Iran also insisted on the right to uranium enrichment. USD/JPY corrected above 158.50 while EUR/USD slipped back to 1.1650 where support was found.
FOMC minutes did see greater upside inflation risks, but were not hawkish, also seeing increased downside risk on employment and not the cause of the USD correction. The commodity currencies were fairly stable, AUD/USD near .7050 and USD/CAD near 1.3850. EUR/GBP and EUR/CHF were both lower on the day, stabilizing near .87 and .93 respectively. Equities remained firmer but UST yields largely erased early losses.