AUD Pares Post-CPI Losses, FOMC In View

The AUD has pared its post-CPI losses in Asia after Q2 headline and core CPI were below estimates. AUD/USD printed a low at $0.6731 before finding support and ticking away from session lows.

• The pair now sits at $0.6760/65, a touch below its pre-CPI levels. RBA-dated OIS sit 5-9bps softer across meetings and RBA-watcher McCrann noted that the CPI print may be enough to keep the RBA on hold in August.
• Kiwi was pressured on spillover from the post-CPI move lower in AUD before support was seen below $0.62. NZD/USD now sits ~0.1% lower on the day, and well within recent ranges.
• Yen is little changed, the pair is see-sawing around ¥141 handle in narrow ranges.
• Elsewhere in G-10 NOK is down ~0.3% however liquidity is generally poor in Asia. EUR and GBP are a touch lower however ranges remain narrow.
• Cross asset wise; BBDXY is up ~0.1% and US Tsy Yields are little changed across the curve. E-minis are flat and the Hang Seng is down ~0.8%.
• The highlight of todays session is the latest FOMC rate decision, the MNI preview is here.