Asia-Pac Hours Bring Stabilisation, Selling Pressure Hits USD

Stabilisation was the order of the day in Asia, as a renewed push for a diplomatic solution to the Russia-Ukraine crisis helped allay the nerves. That being said, a lingering threat of escalation prevented any substantial recovery in market sentiment, with the U.S. asking its citizens to leave Belarus and Transnistria immediately. Major currency pairs generally stuck to familiar ranges.

• The dollar index (DXY) ground lower, moving further away from yesterday's high, as U.S. Tsy yields ebbed lower. Some have pointed to an analysis piece co-authored by NY Fed Pres Williams, which pointed to a decline in inflation expectations as a factor adding pressure to the greenback.
• The latest round of comments from BoJ Gov Kuroda was consistent with previous remarks, as he continued to play down policy exit talk. The official tipped hat to recent yen weakness, noting that it is not boosting import costs by much. USD/JPY slipped in early trade and clung onto those losses, even as it was a Gotobi Day in Japan.
• Weaker crude oil prices sapped some strength from the CAD, which landed at the bottom of the G10 pile. Worth adding that Canadian PM Trudeau invoked emergency powers in response to trucker protests in Ottawa, as had been touted in earlier source reports.
• Spot USD/CNH edged lower on broader greenback weakness. The PBOC failed to move the needle, as they injected a net CNY100bn into the financial system via 1-Year MLF, while keeping the interest rate applied to the operations unchanged.
• UK jobs market data, German ZEW survey, flash EZ GDP as well as U.S. PPI & Empire M'fing take focus from here. Comments are due from ECB's Villeroy and Riksbank's Floden & Ingves.