China Inflation Data Eyed

Markets await inflation data from China to provide a catalyst, data will be released at 0230BST/0930HKT for further evidence the economic cycle has peaked. USD/CNH is lower in early trade after the pair briefly rose above 6.50 on Thursday and CNH recorded its biggest one day loss since mid-June. USD/CNH last down 26 pips.

• AUD/USD is 5 pips higher, picking up from the lowest since December 2020. China data and local COVID-19 concerns will be in focus amid chatter of another extension of the lockdown in Sydney and surrounding areas.
• NZD/USD is down 8 pips, New Zealand's heavy traffic gauge compiled by ANZ rose 1.2% M/M in June after a 6.2% decline in May, with accompanying commentary noting that "in the big picture, the traffic data certainly portrays a very busy economy."
• USD/JPY is 12 pips higher after the pair nosedived on Thursday amid safe haven demand. Reuters reported that the BoJ "is expected to slash this fiscal year's economic growth forecast in fresh quarterly projections due out next week," according to unnamed sources. The Bank will also "likely offer zero interest, long-term funds to commercial lenders that provide loans or investment for activities aimed at combating climate change."
• Elsewhere the won is weaker and making fresh 2021 lows after the government imposed the toughest restrictions on Seoul after a spike in the number of cases that officials called the start of the fourth wave.