DXY Remains On The Defensive

The post-Fed minutes downtick in the USD continued during Asia-Pac hours, with U.S. Tsys underpinned and continued focus on the seemingly impending slowing of Fed tightening evident. That left the greenback and the CHF at the bottom of the G10 FX pile in limited Asia-Pac dealing.

• USD/JPY operates near unchanged levels after some potential gotobi demand and the bid in U.S. Tsys introduced two-way price action.
• The NZD was an early underperformer, with soft NZD data applying some modest pressure to the kiwi, although that has faded.
• USD/CNH briefly ticked higher, with another uptick in the new daily COVID case count in China supporting the pair, before a slightly firmer than expected CNY mid-point fixing and the downtick in the broader USD allowed the cross to move away from best levels.
• USD/KRW more than reversed an early uptick that was a result of increased focus on the BoK nearing the end of its tightening cycle.
• ECB & Riksbank speak headline the broader macro docket on Friday, with wider market liquidity set to be thinned as many U.S. participants opt to take an elongated weekend in lieu of Thursday’s Thanksgiving holiday (note that U.S. markets will be subjected to shortened operating hours ahead of the weekend).
• A reminder that speculation/expectation surrounding a potential RRR cut from the PBoC is elevated after Wednesday's State Council meeting guided towards such a move. Many expect the PBoC to act after local market hours on Friday.