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FOREX: USD Index Close To Cycle Highs, A$, NZD & CAD Around Session Lows

FOREX
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The USD remains on the front foot, the BBDXY index up over 1%, last near 1322. This is just short of levels above 1323, which have marked highs back to 2022. 

  • AUD and NZD are marginally the weakest performers at this stage. AUD/USD is down to 0.6110,  which were levels last seen in 2020. NZD/USD is around 0.5535, but hasn't tested sub 2022 lows near 0.5500 yet. Both currencies are around 1.75% weaker so far today.
  • We just had the Caixin manufacturing print for China which was below forecasts at 50.1, against 50.6 expected. Earlier Australian data was better than expected from a retail sales standpoint, but this has had little lasting impact on AUD.
  • EUR/USD is near 1.0235/40, comfortably above 1.0141, which was recorded not long after today's open, no doubt when liquidity has been lighter. Earlier remarks from Trump reiterated recent threats on tariffs against the EU, stating they were definitely happening but not providing a time line. EUR options activity has been dominating so far, although with a mixture of strike levels above and below current spot levels.
  • Trump also stated in the earlier remarks he will speak to the leaders of Canada and Mexico Monday morning local US time. This remark saw a brief dip in USD/CAD, but moves under 1.4700 have been supported. We were last around session highs at 1.4750.
  • Markets will be hoping such calls lead to negotiations and lowered tariff levels. USD/CAD FX options activity has been skewed towards higher USD call levels  
  • USD/JPY is higher, back to 155.80, up around 0.40%, so still outperforming broader USD gains. The rise up in US yields at the front end, is helping US-JP 2yr differentials, but back end yields are down slightly. US equity futures remain in the red. Regional equity markets are mostly down as well. 
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The USD remains on the front foot, the BBDXY index up over 1%, last near 1322. This is just short of levels above 1323, which have marked highs back to 2022. 

  • AUD and NZD are marginally the weakest performers at this stage. AUD/USD is down to 0.6110,  which were levels last seen in 2020. NZD/USD is around 0.5535, but hasn't tested sub 2022 lows near 0.5500 yet. Both currencies are around 1.75% weaker so far today.
  • We just had the Caixin manufacturing print for China which was below forecasts at 50.1, against 50.6 expected. Earlier Australian data was better than expected from a retail sales standpoint, but this has had little lasting impact on AUD.
  • EUR/USD is near 1.0235/40, comfortably above 1.0141, which was recorded not long after today's open, no doubt when liquidity has been lighter. Earlier remarks from Trump reiterated recent threats on tariffs against the EU, stating they were definitely happening but not providing a time line. EUR options activity has been dominating so far, although with a mixture of strike levels above and below current spot levels.
  • Trump also stated in the earlier remarks he will speak to the leaders of Canada and Mexico Monday morning local US time. This remark saw a brief dip in USD/CAD, but moves under 1.4700 have been supported. We were last around session highs at 1.4750.
  • Markets will be hoping such calls lead to negotiations and lowered tariff levels. USD/CAD FX options activity has been skewed towards higher USD call levels  
  • USD/JPY is higher, back to 155.80, up around 0.40%, so still outperforming broader USD gains. The rise up in US yields at the front end, is helping US-JP 2yr differentials, but back end yields are down slightly. US equity futures remain in the red. Regional equity markets are mostly down as well.