AUD, NZD recover as market digests latest.....>

FOREX: AUD, NZD recover as market digests latest wave of tariffs

-Despite early volatility (most evident in JPY and commodity-tied FX), markets

have generally absorbed the latest wave of trade tariffs installed against

Chinese goods headed to the US with relatively little fallout. This allowed the

AUD, NZD and CAD to recover, a move cemented by an upbeat set of minutes from

the RBA. AUD/USD topped out just 8 pips shy of last week's high overnight.

-EMFX is broadly mixed, with the RUB's outperformance countered by a further

slip in the TRY. Despite the new China import tariffs packing only a modest

punch, USD/CNH remains toward the upper end of the week's range, with the August

highs of Cnh6.8955 appearing to provide firm resistance for now.

-DXY's close below the 100-dma yesterday has left the USD on the backfoot

against most others today, with only GBP and JPY faring more poorly.

Nonetheless, market moves remain shallow, leaving focus on risk events tomorrow,

namely UK inflation numbers, a few speeches from ECB's Draghi and the Bank of

Japan rate decision.