Offshore Yuan Goes Bid, Poised To Snap Three-Day Losing Streak

Spot USD/CNH reversed gains after a failed re-test of a cycle high printed on Monday. There was little in the way of notable headline flow coinciding with that pullback, but Chinese equity indices clawed back their initial gap lower amid a strong rebound in Chinese tech.

• The pair's advance towards recent cycle highs may have been facilitated by the virtual removal of appreciation bias from the PBOC fixing. China's central bank set the mid-point of permitted USD/CNY trading range just 5 pips below sell-side estimate, ending a streak of downside surprises.
• The yen briefly turned bid into the Tokyo fix, possibly bolstered by comments from FinMin Suzuki, who noted that Japan is in close communication with the U.S. on FX and called recent rapid yen weakening "undesirable." It did not take USD/JPY much time to recoup resultant losses, the rate is back to neutral levels and the yen is among worst G10 performers.
• The greenback is trading on a heavier footing as we are heading for the London open. It underperforms all its G10 peers, with the DXY extending its move away from a cycle high printed on Monday.
• German ZEW Survey and Norwegian CPI headline the data docket going forward. Central bank rhetoric will be aplenty, with a decent number of Fed & ECB members due to speak.