Commodity FX Firm Up, NZD Bucks The Trend

Price action across G10 FX space reflected a mildly optimistic mood at the start to the week. Commodity-tied currencies traded on a firmer footing, as continued Sino-U.S. tensions were seemingly outweighed by some questionable positives on the coronavirus front, while S&P 500 e-minis printed fresh record highs.

• NZD was the odd one out and softened against all of its G10 peers, as PM Ardern announced the extension of level 3 lockdown in Auckland by four days through Aug 30, while the RBNZ missed its LSAP buying target, which pushed 10-Year NZGB yield to a record low. Thye Kiwi showed little reaction to in-line Q2 retail sales.
• CHF was offered (virtually) across the board, but JPY remained afloat, amid reports that PM Abe's medical checks could be linked to a chronic disease.
• KRW led losses in Asian EMFX basket, as South Korean health authorities warned that the nation is "at the verge of a massive nationwide outbreak" of Covid-19, noting that the government is studying the need and possibility of tightening social distancing restrictions.
• Calendar-wise, it is a particularly quiet start to the week, with headline and flow watching coming to the fore.