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Greenback Weakens, AUDNZD Rises 0.75% Following Soft NZ Inflation Print

  • Philly Fed Manufacturing index data was surprisingly weak in April (-31.3 vs. -19.3 est.), marking a near-three year low for the metric. Despite a brief bout of USD strength before the data, the greenback weakened in the aftermath and sits moderately lower approaching the APAC crossover.
  • An associated recovery for major equity indices boosted the likes of the Aussie, which is the strongest in G10. In particular, AUDNZD gains of 0.75% are notable on Thursday as the New Zealand dollar remains weighed down by a softer inflation print overnight. Q1 CPI slowed to 1.2% against expectations of a 1.5% print, helping prompt a number of sell-side outfits to redraw RBNZ expectations around the May interest rate hike possibly being the last in the cycle.
  • The Japanese Yen was among the best performers on the back of lower core yields with particular outperformance seen at the front-end of the US curve following the US data. USDJPY had reached an overnight high of 134.97 before sliding all the way back to the 134.00 handle throughout US hours.
  • EUR/NOK continues to grind higher, hitting a new cycle best at 11.6444 today and the highest since Apr'20. Key upside level in EUR/NOK crosses at 11.7486 - the 61.8% retracement for the 2020-2022 downleg and could come into play should the Apr'20 high of 11.6966 give way.
  • Focus quickly turns to flash PMI data on Friday for any signals on the trajectory for the health of eurozone and the US economies. Retail Sales data for both the UK and Canada will also cross.

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