Greenback Stages Recovery

The greenback is maintaining its unexpected bout of strength early in Asia as yields continue to rise in the US. DXY is up 0.238 at 90.741, gapping higher from around 90.60.

• AUD has receded further from the 0.78 handle after challenging the level yesterday, even as Victoria announces it will end the latest 5 day lockdown. RBA's Kent participates in a panel discussion today, so expect further comments from him. A few trickling few so far, the highlight that policy measures continue to place downward pressure on AUD.
• NZD is currently bottom of the G10 pile on broad risk aversion, while New Zealand declared two new cases in the community ahead of today's decision on whether to extend the snap lockdown implemented in Auckland. PM Ardern will formally announce the decision during a press conference at 16:30 NZDT.
• JPY pairs are higher as flows are diverted away from haven assets. Data showed exports rose 6.4%, slightly below estimates. The trade deficit narrowed though as imports fell 9.5% against a 5.5% forecasted decline. Core machine orders rose 5.2% M/M in December, against expectations of 6.1% fall. Elsewhere an armed Chinese vessel sailed through Japanese territorial waters, near the Senkaku Islands claimed by Beijing. It was the first such foray by a Chinese ship since the adoption of legislation that allows Chinese vessels to fire on ships in waters claimed by China.
• Offshore yuan has weakened as USD marches higher, the pair retreats from 6.40 and last trades around 6.4325. GBP and EUR have both given back gains, GBP under some further pressure on reports in the Telegraph that lockdown is unlikely to be eased significantly until daily COVID cases are back in the hundreds, rather than tens of thousands.