USD Index Above Pre FOMC Levels, Yuan Fall Weighs, While Yen Outperforms

The BBDXY is up more than 0.20%, putting the index up around the 1244.40 level. This is above pre FOMC levels from earlier in the week and back to earlier highs from March.

• The USD has benefited from a break higher in onshore USD/CNY spot, which finally pushed through resistance at 7.2000 at the onshore open today. USD/Asia pairs are higher across the board, while AUD and NZD are comfortably the weakest performers in the G10 space.
• AUD/USD is off around 0.70%, last near 0.6525. We aren't too far from earlier lows in the week (0.6504). Weakness in China/HK equities has also been in focus, with earnings concerns along with fresh investment/regulatory fears from the US another headwind. The RBA Financial Stability Review stated the system remains highly resilient. Borrowers are coping with higher rates, in aggregate, at this stage.
• NZD/USD was last near session lows at 0.6010/15, which is also fresh lows for the year. The pair has dipped 0.50% so far today. Outside of the 0.6000 level, note the Nov 17 intra-session low from lats year 0.5940.
• Yen has outperformed, amid the risk averse backdrop. USD/JPY initially went a touch above post BoJ highs (getting to 151.86), but just shy of 2023 highs at 151.91. Lower equities and lower US yields have helped the yen. We sit back near 151.50/55 in recent dealings. Feb national CPI was close to epxectations.
• BoJ Governor Ueda appeared before parliament, stating that the central bank will eventually scale back its bond purchases. This is unlikely to be in the near term as Ueda stated the central bank will assess the market reaction to the recent policy shift.
• Looking ahead, UK retail sales are out, along with the German IFO. In the US the Fed's Barr & Fed's Bostic will speak.