Greenback Holds Post-CPI Decline

Major pairs hugged narrow ranges in Asia with the greenback holding its post-CPI decline.

• AUD/USD is down 8 pips heading into Europe, data earlier showed consumer inflation expectations slipped to 3.3% in August from 3.7% in July. Coronavirus cases remain elevated, there were 345 in NSW today, up from 344 on Wednesday, the lockdown in Sydney was extended this week and looks like it will run until August. Elsewhere there were reports that ACT (Australian Capital Territory) will go into a 7-day lockdown.
• JPY is stronger, USD/JPY down 3 pips after the pair snapped a five day winning streak on Wednesday. Data showed PPI rise above estimates at 5.6% Y/Y and 1.1% M/M. A panel of experts advising the Health Ministry warned that strain on the healthcare system in Tokyo and other localities is reaching a critical phase, as Japan recorded another daily record in new Covid-19 infections.
• Offshore yuan is flat, USD/CNH holding yesterday's losses. There are fears of further regulation with a statement from the State Council yesterday saying it would actively work on legislation in areas including national security, technological innovation as well as anti-monopoly to improve the legal framework and help govern the country.
• Markets look ahead to UK GDP figures and PPI out of the US later today, GBP, EUR and CAD all essentially flat.