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Greenback Gives Up Monday Advance, GBP In Focus Ahead Of March CPI

FOREX
  • The dollar gave back the majority of the Monday gains early Tuesday and there was little impact on currency markets as we progressed through the US session. The USD index sits closed to unchanged on the week as we approach the APAC crossover.
  • AUD and NZD are outperforming, rising just shy of 0.5% following the China GDP data overnight. GDP increased 4.5% y/y in Q1, beating the market consensus of 3.8% y/y, marking the quickest growth within a year and underpinning the bid for higher beta currencies. Initially firmer equities had acted as an additional tailwind to antipodean FX, and despite the turnaround for major indices, little effect was seen across G10 FX.
  • Close to in line Canadian CPI kept USDCAD in a very tight range. With the pair sitting close to unchanged on the session, CAD underperformance is notable.
  • GBPUSD has risen 0.45% as of writing, largely reversing the prior day’s declines in line with the general greenback sentiment. The pair did receive a boost from pay and jobs data this morning, which showed average weekly earnings beating forecast on both a inc. and ex. bonus basis. Resultingly, GBP is close to the top-end of the G10 leaderboard.
  • Cable remains in an uptrend and the Friday / Monday pullback is - for now - considered corrective. A resumption of gains would refocus attention on Friday’s 1.2546 high where a break would resume the uptrend and open 1.2599, Jun 7 2022 high.
  • On Wednesday, the focus will be on UK March CPI data where the headline annual rate is expected to moderate to 9.8% and the core reading at 6.0%. Markets will also receive the final reading of Eurozone March CPI figures.

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