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FOREX: USD/JPY Supported Sub 154.00, NZD Falters As AUD/NZD Tests Higher

FOREX
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The main focus in the first part of G10 FX trading for Friday has been JPY gains and NZD losses. At this stage, the BBDXY USD index is little changed, last near 1286.6. Moves elsewhere have been very muted. 

  • USD/JPY saw a brief dip under 154.00 not long after we had slightly stronger than expected Oct National CPI print (for core measures, headline was as expected). This reinforced the potential live nature of the Dec BoJ meeting, coming after Ueda's comments late yesterday.
  • There was little follow through though and overnight lows in USD/JPY at 153.91 remained intact. The pair was last near 154.30/35, up a modest 0.15% in yen terms for the session.
  • NZD weakness was associated with a break higher in the AUD/NZD cross. This cross got to 1.1180, fresh YTD highs, amid AU-NZ yield differential support. The respective central bank outlooks are divergent in the near term. The RBNZ meets next week (50bps cuts expected), while we also have the Oct CPI in Aust. The cross is a little lower now, last near 1.1140/45.
  • NZD/USD fell to fresh YTD lows of 0.5829, but we sit back above 0.5840 in latest dealings. Next downside target is likely to be round figure support at 0.5800, last tested in Nov last year.
  • AUD/USD has been mostly steady, last down a touch to 0.6505/10.  
  • Looking ahead, we have UK retail sales coming up. There will also be focus on flash UK and EU PMIs. We also get US flash PMIs, along with U. of Mich Consumer Sentiment. Fed speak from Bowman also crosses. 
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The main focus in the first part of G10 FX trading for Friday has been JPY gains and NZD losses. At this stage, the BBDXY USD index is little changed, last near 1286.6. Moves elsewhere have been very muted. 

  • USD/JPY saw a brief dip under 154.00 not long after we had slightly stronger than expected Oct National CPI print (for core measures, headline was as expected). This reinforced the potential live nature of the Dec BoJ meeting, coming after Ueda's comments late yesterday.
  • There was little follow through though and overnight lows in USD/JPY at 153.91 remained intact. The pair was last near 154.30/35, up a modest 0.15% in yen terms for the session.
  • NZD weakness was associated with a break higher in the AUD/NZD cross. This cross got to 1.1180, fresh YTD highs, amid AU-NZ yield differential support. The respective central bank outlooks are divergent in the near term. The RBNZ meets next week (50bps cuts expected), while we also have the Oct CPI in Aust. The cross is a little lower now, last near 1.1140/45.
  • NZD/USD fell to fresh YTD lows of 0.5829, but we sit back above 0.5840 in latest dealings. Next downside target is likely to be round figure support at 0.5800, last tested in Nov last year.
  • AUD/USD has been mostly steady, last down a touch to 0.6505/10.  
  • Looking ahead, we have UK retail sales coming up. There will also be focus on flash UK and EU PMIs. We also get US flash PMIs, along with U. of Mich Consumer Sentiment. Fed speak from Bowman also crosses.