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Greenback & Aussie Trade On Back Foot

FOREX

The greenback has lost shine and lags its G10 peers, despite renewed bear steepening in cash U.S. Tsys, which reopen after a Columbus Day closure. The BBDXY index has slipped, but respects the confines of yesterday's range, while its implied one-month volatility is closing on cyclical highs last touched on Sep 28.

  • U.S. dollar weakness allows USD/CNH to catch a breather after a four-day rally. The pair last deals ~70 pips shy of neutral levels as we await the PBOC fixing, due shortly.
  • The Aussie dollar is among the worst G10 performers. Local data showed softening in the CBA consumer spending indicator, while the Westpac consumer sentiment levels are in the crisis zone from a historical standpoint. Meanwhile, NAB business conditions improved to a 15-month high.
  • AUD/NZD has slid below the NZ$1.1300 mark, with Australia/New Zealand 2-year swap spread slightly softer on the day.
  • Major data releases going forward are limited to the UK labour market report. Speeches are due from Fed's Mester, ECB's Lane & Villeroy, BoE's Bailey & Cunliffe.

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