USD Starts The Week On The Back Foot

MNI (Australia) The USD starts the week on the backfoot, despite a firmer US Tsy yield back drop. The BBDXY is back sub 1252.00, -0.40% for the session. Majors have taken their cue from USD/CNH moves, which is more than 1% below NY closing levels, on further lowered Covid restrictions announced over the weekend. This has buoyed commodities, while equities paint a more mixed picture.

• USD/JPY has been the exception in terms of USD weakness. This pair currently sits around 134.30/35, little changed for the session. We are off earlier highs but have seen little follow through to the downside. Japan data and BoJ talk did little to shift the needle.
• The A$ has performed strongly, up 0.75% to 0.6840/45. The better commodity price backdrop, particularly for copper and iron ore, has helped drive the outperformance trend. Weaker Q3 company profits data was largely ignored by the market. We do get the RBA meeting tomorrow, where slightly less than 25bps is priced in for the outcome.
• NZD/USD recovered from earlier losses, also ignoring generally poorer data. The pair is back to 0.6440, +0.60% for the session. The pair is now eyeing mid-August highs close to 0.6470.
• EUR and GBP are both around 0.50% firmer against the USD, while NOK has slightly outperformed, up 0.60% to 9.7200, with higher oil prices helping.
• Looking ahead Italian, French, German, UK and Eurozone PMI will cross in London hours. Meanwhile NY hours will see US data releases including PMI, Factory Orders, Durable Good Orders and ISM Services Index. The Fed is now in its policy blackout period.