North American Summary and Highlights 21 February
Overview - Weak services PMI data was seen in France and the US. The USD was mostly firmer, but USD/JPY fell sharply with equities and UST yields.
North American session
The USD took a hit on a weak February services PMI of 49.7 from 52.9, though manufacturing edged up to 51.6 from 51.2. Soon after February’s final Michigan CSI saw the 5-10 year inflation view revised up to 3.5% from 3.3%, and the USD rebounded, with the exception of USD/JPY which continued to slide, with UST yields and equites falling.
USD/JPY fell from near 150.50 to near 149. CHF was also relatively firm with EUR/CHF falling below .94. EUR/USD ended little changed from the European morning while GBP/USD saw marginal further losses. The commodity currencies were weaker, USD/CAD rising to 1.4230 from 1.42 and AUD/USD falling to .6355 from 0.6390. BoC’s Macklem outlined the damage tariffs could potentially do to the Canadian economy, but had little market impact.
European morning session
GBP/USD was lifted by a stronger than expected 1.7% rise in January UK retail sales, but the bounce was brief, with EUR/USD taking a hit from a weak February PMI data in France, with services falling to 44.5 from 48.2, though German data released soon after showed little change. EUR/USD fell to around 1.0470 from near 1.05 while EUR/GBP slipped to .8275 from .8290, leaving GBP/USD marginally softer. USD/JPY. USD/CAD and AUD/USD all showed little movement.