Antipodean Divergence In Early Trade

The greenback holding most of its post-FOMC gains, local dynamics driving divergence in Antipodean pairs. AUD/USD down 10 pips, giving away further ground after a speech from RBA Governor Lowe where he maintained a dovish outlook and said the Bank would not hike rates until inflation is sustainably above 2%. Markets await labour market data later in the session.

• NZD/USD has seen a firmer recovery, the pair up 22 pips. Data earlier showed GDP rose 2.4% Y/Y, well above estimates of 0.9%. Following the release ANZ said it now expects the RBNZ to raise the cash rate in February.
• USD/JPY is up 9 pips, local wires have suggested that Japan plans to begin issuing COVID vaccine passports from July, while there have also been suggestions that Japan is set to extend its employment subsidy scheme through August.
• Offshore yuan is slightly stronger but still holding most of the decline seen post FOMC. Data yesterday showed activity continued to ease in May.