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US Dollar Rallies On Higher Yields & Risk Pullback


The USD continues to strengthen during the APAC session as risk sentiment deteriorates further. The BBDXY index is up another 0.2% driven by higher UST yields. In the G10, Aussie, Kiwi and Scandi are the biggest losers against the greenback. In Asia, the KRW has been impacted the most. There has been little on the data front with headlines pointing to further geopolitical tensions.

  • USDJPY is up moderately at 145.84 after reaching a high of 146.11 earlier. AUDUSD reached a low of 0.6619 after soft Australian consumer sentiment data but is now at 0.6633 to be down 0.4% on the day. AUDJPY is down 0.4% to 96.74.
  • NZDUSD has bounced off its low of 0.6160 and is now down 0.3% at 0.6178. AUDNZD is down 0.1% at 1.0736.
  • EURUSD is 0.2% lower at 1.0928 and GBPUSD is -0.2% at 1.2697.
  • USDKRW has fallen 0.6% to 1327.65 off the intraday high of 1329.65.
  • China’s fixing error term widened moderately today in USDCNY terms. USDCNH closed slightly lower on Monday at 7.185 but is currently 0.1% higher at 7.1902. We did dip to 7.1853 earlier in the APAC session and then spiked to 7.1949.
  • Equities are selling off across the region with the Nikkei down 0.7%, the Hang Seng -0.6% and the ASX -1.0%. Oil prices are lower with WTI down 0.7% to $72.18/bbl. Copper is 0.9% higher and iron ore lower at $132-133/t.
  • Later the Fed’s Waller speaks on the economic outlook and monetary policy, ECB’s Villeroy participates in a Davos panel and BoE’s Bailey speaks. On the data front there is January US Empire manufacturing, UK employment/wages and Canada’s CPI.

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