USD Loses Ground Amidst Firmer Equity Backdrop

USD loses have extended as the Asia Pac session has progressed. The BBDXY sits 0.20% lower, last near 1223.50. A better risk on tone from equities, with Asia Pac markets higher and US futures ticking up, has weighed on USD sentiment. US yields are little changed as the CPI print comes into view.

• NZD and AUD have outperformed, consistent with the risk on theme, although JPY is not far behind.
• NZD/USD is up nearly 0.40% to 0.6250, but we remain comfortably within recent ranges. Earlier data showed Nov building permits down over 10%m/m, but this followed a strong Oct rise.
• AUD/USD is up +0.30%, last in the 0.6720/25 region. The Nov trade surplus surged thanks to a lower import bill as consumer imports slumped.
• USD/JPY sits in the 145.30/35 region, around 0.30% stronger in yen terms. Lows for the session rest at 145.29. The OECD sees scope for the BOJ to adjust away from ultra easing settings, with wages growth expected to keep inflation close to the BoJ target.
• All eyes in the US session will be on the CPI release.