USD Tracking Lower Ahead Of CPI Print

The USD index hits high not long after the PBoC announced a 10bps cut to its 7-day repo rate. We got to 1235.35, but we now sit back near 1233.40, a little over 0.10% below NY closing levels. In the cross asset space, we have seen weaker US yields post the PBoC announcement (2yr yield back to 4.55%, off 2.5bps), while US equity futures have firmed, as have regional equities. These trends have weighed on the USD.

• AUD/USD fell in sympathy with weaker CNH levels post the PBoC announcement, but support was evident sub 0.6740, the pair back above 0.6760 now, +0.15% for the session. NAB raised its terminal rate forecast to 4.60% for the RBA, but we saw generally depressed consumer confidence prints, along with weaker NAB business confidence and conditions reads. Commodity prices are firmer, but haven't seen much positive follow post the China rate news.
• NZD/USD is a touch higher, but is lagging the A$ at the margins, the pair last just above 0.6125.
• USD/JPY is down slightly versus NY closing levels, last under 139.45. Better Q2 business conditions and Ueda comments not shifting sentiment much.
• EUR/USD is around 0.20% firmer, last near 1.0780, although this pair has been able to sustain breaches above the 1.0780 handle in recent sessions.
• Looking ahead, we have the UK labor market survey and German ZEW, but the main focus will be on US CPI out later.