USD On The Defensive Into CPI, JPY Outperforms

The broader USD has extended its run lower, breaching its May lows in BBDXY terms, as the EUR/USD cross extends its move above $1.1000, while USD/CNH has another look below CNH7.20. Tier 1 event risk looms large over markets today.

• The greenback finds itself at the foot of the G10 FX table, while the JPY is at the other end (carry trade unwinds, BoJ speculation, yield differentials and a move lower in Japanese equities have been outlined as drivers for the pull away from recent highs in USD/JPY over the last few days).
• Asia-Pac focus was generally still geared towards the prospect of Chinese stimulus, with the RBNZ delivering the widely expected on hold decision (generating a larger move in NZD rates than in NZD) and the RBA outlining some tweaks to its monetary policy delivery (headlined by a reduction in the number of meetings per year) as participants await the announcement of the next RBA Governor (with Lowe expected to be moved on from the post).
• The U.S. CPI print and BoC decision headline the broader docket today, while the latest soundbites of Fed & ECB speak will garner interest. Elsewhere, final Iberian CPI data is due out of Europe.