Fed Speaker Sings From Familiar Hymn Sheet

Fed's Waller spoke early in the Asia-Pac session, he was positive on the economy but noted that while the taper could come earlier than expected he did not move his "dot" forward at the June meeting. Waller also said that the labour market has not quite returned to pre-COVID levels.

• NZD is under pressure, NZD/USD down 3 pips after dropping throughout the session on Tuesday. RBNZ Gov Orr said Tuesday that economic activity is returning to its pre-Covid levels and policy could normalise over the medium term, if global recovery is sustained.
• AUD/USD is up 3 pips, the pair also sustained a drop on Tuesday. Brisbane is the latest city to impose a lockdown, joining Perth, Sydney and Darwin; around half of the population are now in lockdown.
• USD/JPY is flat. Data showed industrial output fell faster than expected on the month, dropping 5.9% against a 2.1% fall expected, the Y/Y figure rose 22.0% against 27.0% expected. Following the release METI said it sees July output falling 1.4% on the month.
• Offshore yuan is broadly flat, USD/CNH last down 5 pips. Markets look ahead to official PMI data, both manufacturing and non-manufacturing are expected to slow but remain in expansionary territory.
• GBP/USD up 9 pips. There was chatter that some restrictions could remain in the UK after the July 19 reopening date, but that those who have received both doses of the vaccine will not have to isolate after coming into contact with a COVID patient.