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Greenback Following Trend Lower

FOREX
  • In contrast to Thursday's session, early Europe saw JPY selling pressure aided by a strong start for continental equity markets. Trading has possibly be drawn by the sizeable option interest layered between 110.00-25, with $1.7bln notional rolling off at Friday's NY cut.
  • Early greenback weakness extended into the NY crossover, with new daily USD lows printed against EUR, GBP, CNH, AUD and others. This put the USD Index through yesterday's lows and within range of support at the 61.8% Fib retracement of the Aug - Sept upmove at 92.2965. Macro newsflow/catalysts for the move lower were few and far between, but the weakness was infitting with the short-term trends in GBP/USD, USD/CNH and AUD/USD.
  • This puts JPY, USD at the bottom of the G10 table, while NZD, NOK and AUD outperform.
  • US PPI data takes focus going forward, with markets expecting a new series high at 8.2% Y/Y on a final demand basis. The speaker slate is a little busier, with ECB's Lagarde and Elderson due as well as Fed's Mester.

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