Dollar Index Hits Highest Since Nov 2020

Despite a lack of significant newsflow during the session the greenback managed to rise to the highest levels since 2020 which helped catalyse moves in major pairs. It was hard to identify a fresh cue for the move, though proximity to the FOMC minutes could suggest Asia-Pac participants are looking the Fed's July meeting minutes from a different perspective.

• AUD/USD heads into Europe hovering around the 0.7200 handle, near the lowest since November 2020 with losses of around 30 pips. Data showed that the labour market unexpectedly gained jobs which took the pair off its lows, but the breakdown of the data was weak and the move lower resumed. There was also a pickup in Victoria coronavirus cases which added to negative sentiment.
• NZD/USD is down 39 pips. There were 11 new cases of coronavirus, taking the community total to 21. RBNZ Governor Orr spoke earlier and stressed that the Bank's strong view is to continue to reduce stimulus given the strong position of the NZ economy, Orr also noted that the Bank would have likely lifted the OCR yesterday in the absence of lockdown/COVID cases.
• USD/JPY is up 40 pips. Driven mainly by the move in USD. The Reuters Tankan manufacturing survey rose to 33 from 25 previously.
• Offshore yuan is weaker, USD/CNH is up 133 pips, the PBOC fixed USD/CNY at 6.4953, in line with sell side estimates. As a reminder markets look to the PBOC's LPR announcement tomorrow.
• Oil continued its decline which saw USD/CAD rise 35 pips, while EUR/USD and GBP/USD both fell around 40 pips.
• Upcoming data includes weekly US employment data, the labour market is seen as key for the Fed taper after the FOMC minutes yesterday.