North American Summary and Highlights 17 Apr
Overview - The USD slipped with UST yields. A boost to the GBP from CPI data was undermined by dovish comments from BoE Governor Bailey.
North American session
There was little news in the US, with the Fed’s Beige Book similar in tone to the last report. However UST yields saw a significant slide, and this weighed on the USD. USD/JPY slipped to 154.35 from 154.65 while EUR/USD rose to 1.0670 from 1.0640. The USD also slipped versus AUD and CAD.
GBP underperformed, with BoE Governor Bailey seeing the latest inflation data as in line with BoE forecasts and expecting a strong drop in inflation next month. EUR/GBP more than reversed European losses to touch .8570 while GBP/USD was little changed near 1.2450.
European morning session
The USD was slightly softer through the European morning. EUR/USD gained around 20 pips to 1.0640, and GBP/USD was a little stronger, rising around 40 pips to 1.2470. GBP was helped by the slightly stronger than expected UK CPI data, which saw y/y CPI inflation fall to 3.2% y/y against the 3.1% expected. The core also fell slightly less than expected to 4.2% against the 4.1% expected. EUR/GBP dipped as low at 0.8520 before recovering to be down only around 10 pips on the morning at 0.8540. UK front end yields were only very marginally higher.
The USD was also generally softer elsewhere, but USD/JPY was only down around 10 pips to 154.55, and USD/CHF also lagged a little, with EUR/CHF recovering strongly above 0.97 after an initial dip.