Greenback Retreats, Risk-On Flows Take Hold

The risk switch in G10 FX space was flicked to on, denting demand for safe haven currencies. The greenback underperformed, closely followed by JPY & CHF. USD/JPY had a brief look below its 50-DMA for the first time in months but quickly unwound losses into the Tokyo fix, possibly on the back of Gotobi day demand or lack of any fundamental drivers behind the initial downswing. BoJ Gov Kuroda provided little in the way of fresh insights during his latest address, with broader headline flow providing no major catalysts.

• Greenback weakness was cemented with USD/CNH dipping below CNH6.5000 for the first time since mid-March, even as China's central banks set the central USD/CNY mid-point at CNY 6.5103, 6 pips above sell-side estimate. The PBOC kept LPR rates unchanged for he twelfth month, which had been widely expected.
• High-beta FX traded on a firmer footing as sentiment improved and commodity prices firmed. Antipodean currencies saw round figures give way, as AUD/USD showed above the $0.7800 mark, while NZD/USD punched through $0.7200.
• EUR/USD climbed past its 100-DMA, which had been intact since early March.
• UK labour market data & a speech from ECB's de Cos take focus from here.