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Precious Metals Retreat, USD Recoils


DXY bounced into positive territory and the greenback jumped onto the top
of the G10 pile as gold and silver retreated. Precious metals were
offered amid apparent profit taking after gold futures (Z0)
topped out at 2,000. A sudden recovery in USD set the tone of G10 FX
price action in the Asia afternoon.

  • AUD crosses pulled back from highs alongside gold & silver. NZD followed
    suit, but its decline was deeper, perhaps as China protested New Zealand's
    decision to suspend its extradition treaty with Hong Kong.
  • The loonie was bid, USD/CAD printed a 7-week low before USD recovery.
  • Despite trimming losses, USD/IDR continued to operate below neutral
    levels, following the formation of a "death cross" (50-DMA < 200-DMA).
  • Renewed demand for USD inspired a strong rebound in USD/KRW, capped
    only by yesterday's highs. The won led losses in Asia EM FX space.
  • Focus moves to U.S. Conf. Board Consumer Confidence, as well as Swedish
    retail sales and trade balance.

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