Kiwi Falters, Asia-Pac Session Quiet Ahead Of LNY

NZD was the worst G10 performer, edging lower alongside NZGB yields, with BBG trader sources flagging the trimming/squaring of NZD/USD & AUD/USD long positions for short-term accounts. The Aussie was somewhat more resilient than its Antipodean cousin, as Australian Westpac Consumer Confidence improved this month. The news that China suspended imports from two NZ factories may have applied some mild pressure to NZD, with the reinstatement of LVR restrictions also grabbing attention locally. AUD/NZD is poised to extend its winning streak to five days in a row.

• The DXY ground lower, moving past yesterday's worst levels, ahead of a speech from the Fed chief & as e-minis advanced, with S&P futures printing fresh record highs. All in all, G10 crosses were rangebound as local players awaited Lunar New Year holidays.
• USD/JPY climbed into the Tokyo fix, perhaps on the back of Gotobi Day flows, but faded the move thereafter. The rate sits marginally shy of neutral levels as we type, struggling to punch through yesterday's low.
• USD/CNH saw a brief spell of slightly increased volatility in reaction to a miss in Chinese CPI. The PBOC fixed USD/CNY at CNY6.4391, 13 pips above sell side estimates.
• KRW soared despite a decent, above-forecast increase in South Korean unemployment, amid speculation that traders were existing short positions ahead of LNY. USD/KRW dived to worst levels in two weeks.
• On the radar today: U.S., German & Norwegian CPIs, French industrial output, Riksbank MonPol decision & comments from Fed Powell, ECB's Lagarde, de Cos, Visco & Panetta, BoC's Lane & BoE's Bailey.