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    European Session – Sterling rises as Brexit campaign suspended; Canadian dollar lifted by higher oil prices

    Sterling maintained gains after rising two big figures on Thursday, jumping from 2-month lows versus the dollar to the $1.42 handle. The suspension of campaigning for the UK’s EU referendum has led to some easing of concerns over the June 23 vote, taking Brexit off the headlines momentarily, although these developments have come at the expense of the murder of British MP Jo Cox on Thursday.

    As markets reassessed the risk of the UK voting to leave the EU in the referendum vote on June 23 and with the absence of new polls in the past two days, the pound rose to test the key $1.43 level, recovering from Thursday’s low of $1.4013, its lowest since early April.

    The euro maintained gains after rising against the dollar on Thursday, to recoup the key $1.12 handle. The single currency also benefited from calmer markets today and pivoted around $1.1250 in a quiet European session in the absence of key economic data releases.

    The dollar moved sideways against the yen but stayed above the key 104 yen level after bouncing from 103.53 yen yesterday. The dollar is set to end the week down against the yen following the Japanese currency’s surge in response to the Bank of Japan’s inaction at its policy meeting. The BoJ refrained from expanding its record monetary stimulus.

    US housing data today did little to move the dollar/yen pair. US housing starts fell 0.3% to a 1.16 million annualized rate from a 1.17 million pace in April. That was better than expectations of a fall to 1.15 million. Meanwhile, building permits climbed 0.7 percent in May to a 1.14 million annualized rate from the prior month’s 1.13 million and missed the 1.15 million forecast.

    The Canadian dollar was given a boost today due to rising oil prices, reversing some of this week’s huge losses against the dollar. The loonie held onto gains even after data showed Canadian inflation eased in May. Consumer prices advanced by 1.5% year-on-year last month compared to April’s rate of 1.7% year-on-year and was lower than the 1.6% that was forecast. Meanwhile, the consumer price index on a month-on-month basis rose 0.4% in May versus 0.5% expected and was slightly higher than April’s 0.3%.

    Brent crude rose to $48.51, up almost 3% on the day so far, while US oil gained 3% to $47.38. USDCAD fell to $1.2870 from the day’s high of $1.2942.

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