The firmer USD tone spilled over into Asia....>

FOREX: The firmer USD tone spilled over into Asia on extended react to Fed Chair

Powell's hawkish view on inflation. Usd/Jpy touched Y107.53 but was quick to

pare gains after the BoJ surprised markets and reduced their bond buying in the

25y sector from Y80bn to Y70bn. Slippage extended to Y107.00 into Europe, before

renewed USD demand recovered to the Y107.20/25 area.

- The early USD demand pressured both EUR and GBP. Eur/Usd triggered reported

stops through $1.2205, touched pullback lows of $1.2199 before fading. EZ CPI

came in-line with expectations on the headline and core (1.2%, 1.0%). Gbp/Usd

was pressured on the early move to $1.3873, but later reclaimed the $1.39 handle

as markets await release of the EU's first draft of the Brexit treaty.

- Soft Chinese PMI data, weaker commodities and a firmer USD all attributed to

AUD slippage in Asia. Rate printed lows of $0.7781, but later reclaimed $0.78

during the quiet European morning session.

- SEK continued to underperform after the miss on Swedish GDP, touching

Sek10.0857 on react. HKD weakened against the USD to multi-year lows of

Hkd7.8298. MNI Chicago report & Pending Home Sales due at 1445/1500GMT.