NZD Outperforms As Some Asian Currencies Struggle

The kiwi sits atop the G10 FX pile on the back of a lack of fresh dovish insight from RBNZ Governor Orr and no sign of resistance against the recent round of NZD strength. The flow seemed to be AUD/NZD linked, with the cross pressured through the initial round of support levels we flagged earlier, as NZD bears feel the pain. We also mentioned trend support, which is located at NZ$1.0824 today, bears now target that level, with the cross last hovering around NZ$1.0850, after edging away from session lows.

• The USD managed to lodge modest gains against the remainder of the G10 FX space in a news light Asia-Pac session.
• Tuesday's USD turnaround dragged EUR/USD from fresh cycle highs of $1.2011 back down to the lower regions of the $1.1900 handle, with fresh pressure seen on the back of comments from ECB chief economist Lane, as he noted that the level of the cross does matter, even though monetary policy doesn't target the exchange rate. This built on the re-deployment of the "while any premature tightening of financial conditions could put the ongoing recovery at risk" passage in the accounts of the ECB's July meeting. Rate last deals at $1.1905. Yesterday's high presents the initial resistance for the cross, with support located at the August 31 low of $1.1884.
• In the USD/Asia space we saw the IDR struggle on the back of a proposal to overhaul Bank Indonesia's mandate, which would include the Finance Minister sitting atop a 5 person board, in turn generating fresh questions re: the independence of the central bank (building on worries surrounding the debt monetisation policy that has been adopted in recent times). Bank Indonesia stepped into the market as it intervened to stem the IDR's decline, reiterating its belief that the IDR is fundamentally undervalued.
• THB also traded on the backfoot, following the resignation of Thailand's Finance Minister, who was in the role for less than 1 month.
• U.S. ADP and factory orders data are the calendar highlights Wednesday. Elsewhere, central bank speak picks up with representatives from the BoE, Fed and ECB all due