USD Recovers Some Ground, A$ Weighed By Retail Sales Miss

The USD has recovered some ground today, mainly against AUD and NZD, with yen also weaker. The BBDXY USD index sits up around 0.20%, last near 1260.70.

• AUD/USD is down 0.5% to 0.6530/35 during today’s APAC trading as weaker Aussie retail sales and China services PMI weigh on the currency, which is unwinding the 0.5% gain from Monday. We are just below 0.6441 support.
• Australian retail sales were weaker than expected in March falling 0.4% m/m after rising 0.2% with the decline broad based. They are now up only 0.8% y/y.
• Regional equities are mostly stronger, although China markets are lagging modestly. US Tsy yields are down around 1bps.
• NZD/USD has been dragged lower, with AUD, off 0.50% to just under 0.5950. We did have weaker NZ survey results, but only off recent highs.
• USD/JPY has climbed, but couldn't reclaim the 157.00 level. We were last near 156.75/80, around 0.30% weaker in yen terms. The market is testing the waters post yesterday's strong rebound amid intervention speculation. Earlier comments from Chief FX Diplomat Kanda stated the authorities are ready to deal with FX at any time of the day, but declined to confirm whether they intervened yesterday. Mixed Japan data outcomes didn't shift FX sentiment.
• Later US Q1 ECI, February house prices, April MNI Chicago PMI and consumer confidence print. The ECB’s Buch speaks and euro area preliminary April HICP, and German, Italian & French Q1 GDP are released.