USD Supported On Dips, As Stronger CNY Fixing Sees Little Follow Through

The BBDXY index has been supported on dips so far today, although we aren't in positive territory for the session, the index sitting at 1243.3 currently (earlier lows were at 1242.28). Overall moves have remained modest.

• The USD has found some support amid a less positive regional equity market backdrop, with HK and China slightly lower. US yields remain lower though, although losses (-1bps) are only modest compared to gains seen in Monday trade.
• The CNY fix was again set stronger the expected but follow through USD/CNY downside was limited and the pair has rebounded back towards 7.2200, limiting USD weakness elsewhere.
• AUD/USD couldn't sustain gains above 0.6550, we last tracked near 0.6535/40. The above mentioned equity weakness a headwind, while iron ore is also weaker. The active Singapore contract back under $106/ton, off a little over 2.6%. Copper is also weaker.
• On the data front we had Westpac Australian consumer sentiment drop, while the Japan PPI services came is as expected at 2.1% y/y.
• USD/JPY has traded tight ranges overall, the pair last near 151.35/40. Earlier comments from FinMin Suzuki were in focus in relation to FX. They largely echoed comments made by FX Chief Kanda yesterday.
• NZD/USD is modestly outperforming AUD, but hasn't drifted too far away from the 0.6000 level. The AUD/NZD cross saw selling interest emerge above the 1.0900 level (last near 1.0885).
• Later US February durable orders, January CoreLogic house prices, March consumer confidence and Richmond Fed indices print. ECB’s Lane speaks.