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Early Moves Reversed

FOREX

After an initial decline the greenback picked up from lows, putting pressure on high beta currencies as risk assets lost favour.

  • AUD and NZD are both lower, impacted by a stronger USD. Markets await the RBA rate announcement. There is seemingly little scope for anything in the way of notable developments at the upcoming RBA meeting, given the recent deluge of rhetoric from the RBA Governor.
  • JPY has lost some ground, USD/JPY up 20 pips at 110.38. Data earlier in the session was broadly positive with labour cash earnings and real cash earnings both rising above estimates. Household spending fell more than expected though, despite encouraging retail sales data in the period.
  • Offshore yuan has declined, USD/CNH up 53 pips at 6.5618, data earlier in the session showed Caixin Services PMI rose to 54.3 in March from 52.1 previously, this denotes the highest reading since December 2020 and the eleventh consecutive month of expansion. Service providers were very confident about the prospects for the economic recovery and getting the pandemic under control. The gauge for business expectations rose to the highest point since February 2011. Elsewhere reports the PBOC asked lenders to reign in loan growth over bubble risks have been rerun.

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