Greenback Rally Pauses At Four Month High

The greenback has dipped slightly after finishing the session yesterday at the highest since November 2020, while equity markets are in positive territory which has allowed high beta currencies to make some progress higher.

• AUD/USD is around 12 pips higher recovering from ytd lows, there were reports in The Australian that the domestic economic recovery has resulted in a reduction of the budget deficit by AUD 23bn as more than expected are able to relinquish support measures and tax payments increase.
• NZD/USD is around 18 pips higher also recovering from ytd lows, ASB revealed it was the bank that made use of the RBNZ's Funding for Lending Programme (FLP) for NZ$500mn earlier this month.
• JPY is slightly softer as risk assets are preferred, USD/JPY around 5 pips higher. Tokyo CPI metrics fell roughly in line with expectations, with core CPI printing at -0.1% Y/Y vs. -0.3% prior, as the state of emergency in the capital ended.
• PBOC fixed USD/CNY at 6.5376, 8 pips below sell side estimates. Offshore yuan is stronger, the weaker greenback creating space for yuan to expand in to. It was reported earlier China is placing sanctions on UK individuals and entities over comments of treatment of Uighur muslims in Xinjiang province. The PBOC have issued a research note which sees 2021-2025 potential growth at 5%-5.7%, the NPC set the growth target at over 6%.