Greenback Upside Continues In Asia

The greenback has extended its bid in early Asia. USD moved higher ahead of the FOMC announcement and has built on its gains as US equity markets endured their worst day since October.

• AUD and NZD both lower. AUD weighed on by lower iron ire prices, data earlier in the session showed export prices rose 5.5%, while import prices fell 1%.
• NZD extends losses, data earlier showed NZ trade surplus shrunk to NZ$17mn from NZ$290mn, defying expectations of an expansion to NZ$800mn. Exports rose slower than expected, which was coupled with a dynamic, above-forecast increase in imports.
• JPY crosses mostly higher, USD/JPY extending gains beyond 104.00, last up 17 pips at 104.28. The results of an NHK survey suggested that a majority of Japanese companies think that the Tokyo Olympics should go ahead in July. Elsewhere retail sales fell less than expected in December.
• EUR and GBP both softer on greenback strength. ECB's Centeno gave an interview to RTP3, warning that the health and economic crises cannot transform into a financial crisis, as "that risk is always latent."
• PBOC fixed USD/CNY at 6.4845, another miss lower for sell side estimates. The PBOC should be more comfortable with the redback weakening as the greenback makes strides forward. USD/CNH now trading back over 6.50, the pair hasn't closed above the level since Dec 31. The PBOC drained CNY 150bn via OMOs, even as overnight repo rates hit multi-year highs. There was a piece in the Securities Journal that posited China will offer additional liquidity ahead of LNY.
• USD/KRW is at levels not since November 2020, the following an Article IV consultation the IMF said that the BoK had room to cut rates further.
• Markets look ahead to German HICP figures, US GDP data and several ECB speakers.