USD Remains On The Defensive Post-CPI

The Asia-Pac reaction to yesterday’s U.S. CPI release and subsequent market gyrations applied some fresh pressure to the greenback, with the BBDXY hitting the lowest level since April of last year in the process.

• EUR/USD bulls threatened to break $1.1150, while cable trades either side of $1.3000 early on in London after showing as high as $1.3019 in Asia (monthly UK GDP data wasn’t quite as soft as expected, but did little for GBP on net).
• USD/CNH bottomed out just above CNH7.1600, with a narrower than expected monthly Chinese trade surplus crossing a little after (both exports and imports missed expectations in M/M $ terms). The bias towards CNY strength in the PBoC’s USD/CNY mid-point fixing continues to moderate from YtD extremes.
• The Kiwi is the G10 outperformer, with offshore leveraged buying and carry chasing flagged by traders speaking to BBG.
• Meanwhile, the JPY finds itself at the other end of that table with the aggressive pull lower in USD/JPY finding a base just ahead of Y138.00. Bids in equities were flagged as the source of pressure for the yen.
• U.S. PPI & weekly jobless claims data headline the global economic docket today, while the latest rounds of Fedspeak will also be eyed in light of the CPI release. The accounts covering the most recent ECB meeting will also cross.