Caution Prevails In Limited Asia Session, FOMC Decision Eyed

Macro headline flow was light in Asia-Pac hours, with G10 FX pairs happy to hug relatively tight ranges as a degree of caution crept in. The DXY edged higher but was nowhere near erasing yesterday's losses, CHF also gained on the back of risk-off feel. JPY failed to appreciate alongside its safe haven peers.

• CAD led commodity-tied FX space lower, even as crude oil inched higher. AUD gave away gains registered in reaction to a beat in Australian CPI data, with main driving factors (tobacco tax hikes, matters surrounding childcare costs) under scrutiny.
• PBOC set USD/CNY reference rate at CNY6.4665, 30 pips above sell side estimates – the second straight day of a significant miss which again underscores the PBOC's asymmetric response function to the yuan. The bank drained a net CNY100bn via OMO's, after a CNY78bn drain yesterday.
• GBP crosses were rangebound amid continued speculation re: the UK's next steps in its fight with coronavirus. The Times reported that the UK gov't will opt for a limited hotel quarantine system, applying it only to travellers arriving from the highest-risk countries.
• Focus turns to the FOMC MonPol decision, flash U.S. durable goods, German & French consumer confidence gauges, Swedish trade balance as well as comments from ECB's Lane & Villeroy and Riksbank's Breman.