Reasons For Light USD Demand

It is hard to get a real read on the reason behind the recent, modest USD bid. Potential drivers (outside of flows) include:

• The earlier Russian attack on a Ukrainian facility that contains an experimental nuclear reactor, with a nearby hostel catching fire
• There is some focus on the Chinese equity space after Chinese stocks listed in the U.S. took a hit as the SEC identified 5 Chinese firms that were not keeping up with compliance requirements under its Holding Foreign Companies Accountable Act, with the firms potentially subject to delisting in the coming years as a result. E-minis also moved lower ahead of the Chinese market open.
• USD/JPY has edged away from the fresh multi-year highs lodged round the Tokyo fix, while the EUR still sits atop the G10 FX pile, although the EUR/USD bid has moderated a little.