Calm & Cautious

The Asia-Pac session was calm, dominated by a moderate sense of caution. AUD was the worst G10 performer, albeit trailing its peers from the basket by relatively narrow margins. RBA Gov Lowe offered little in the way of fresh insight in his latest address, as he warned against uneven economic recovery. AUD/JPY ground lower printing a one-week trough and threatening to attack its100-DMA, but backed off before testing that moving average. Sales in AUD/NZD helped the pair move closer to its recent cycle low, but stabilised seeing the key level ~25 pips away. JPY firmed up a tad, with USD/JPY shedding a handful of pips into the Tokyo fix.

• The redback touched best levels against the greenback in more than two years. USD/CNH edged higher after a slightly weaker than expected PBoC fix, but then turned its tail and dipped to fresh session lows.
• USD/KRW inched lower later in the session, despite a worrying acceleration in the spread of new Covid-19 infections in South Korea. The rate tested the round figure of KRW1,105.00, virtually coinciding with the low print of Dec 4, 2018.
• Focus turns to inflation data from the UK, EZ and Canada, U.S. housing starts & building permits, as well as comments from Fed's Williams, Bullard and Kaplan, BoE's Bailey & Haldane, ECB's Enria & BoC's Wilkins.