Risk-Off Storm Intensifies, Forces AUD/USD To Give Away Post-CPI Gains

The Asia-Pac session witnessed a renewed flight into safe haven currencies, as regional equity benchmarks retreated alongside U.S. e-mini futures on the back of imminent policy decision from the Fed & deepening geopolitical angst.

• The yen comfortably outperformed its G10 peers, with Tokyo traders digesting Monday headlines surrounding the Russo-Ukrainian stand-off. Demand for safer assets provided a tailwind for the greenback, but the DXY failed to re-test yesterday's peak.
• Sydney morning saw AUD catch a bid after Australian inflation data topped expectations, with the RBA's preferred measure of core inflation printing above the mid-point of the target range for the first time since 2014. The release boosted hawkish RBA bets, with market pricing pointing to potential for a rate hike as soon as in May.
• There was talk of cross flows applying pressure to the kiwi after Australian data hit the wires, albeit AUD/NZD struggled to take out the NZ$1.0700 figure. New Zealand's own Q4 CPI data on Thursday will provide an input into the comparative assessment of policy outlooks of Antipodean central banks.
• Post-CPI bid in AUD evaporated later in the Asia-Pac session, as risk-off flows intensified. AUD/USD erased its initial gains, but the Aussie remained the best performing high-beta currency. NOK was the main laggard, as the Ukraine tension outweighed an uptick in crude oil prices.
• German Ifo Survey & U.S. Conf. Board Consumer Confidence take focus on the data front today. Central bank speaker slate features ECB's Holzmann & Riksbank's Skingsley.