USD On The Defensive To Start

Thanksgiving holiday thinned Asia-Pac trade is seemingly being dominated by cross-market flows, as regional participants react to Wednesday’s soft U.S. data and the FOMC meeting minutes, which is weighing the USD, while supporting core global FI markets and equities.

• Headline flow has been dominated by another uptick in COVID cases in China, with new daily case numbers in the country now through their previous ’22 peak.
• The JPY leads when it comes to G10 FX performance, with Tokyo returning from a mid-week holiday and reacting to news flow observed over the last 36 hours or so.
• Elsewhere, RBNZ Governor Orr & chief economist Conway reiterated the Bank’s focus on getting inflation under control in an early parliamentary address.
• We also saw the BoK deliver the widely expected 25bp rate hike.
• USD/CNH operates within the confines of Wednesday’s range, with no bias observed in today’s USD/CNY mid-point fixing, which was virtually bang on the BBG survey median.
• Asia FX is playing catch up to the USD weakness witnessed since yesterday’s local market closes.
• There isn’t anything in the way of tier 1 risk events slated for Asia-Pac hours. Further out German IFO data, the accounts covering the latest ECB meeting, and a range of ECB & Riksbank rhetoric provide the highlights of Thursday’s docket.