USD Weighed By Firmer Risk Appetite

The USD has remained on the back foot for much of the session. The BBDXY is down 0.25%, back to the low 1276/77 region. Generally positive equity market sentiment, coupled with a slight downtick in UST yields, has weighed on the dollar.

• Data outcomes have generally been disappointing, particularly the China PMI trends, which fell further into contractionary territory. This had no lasting impact on sentiment though.
• AUD/USD dipped post a decent monthly CPI miss, but the pull back to 0.6670 was supported, the pair last at 0.6700. AU bond yields are lower, the 2yr off by 6bps. AUD/NZD is lower, last around 1.0760, but we are yet to test recent lows around 1.0750.
• NZD/USD is the best performer within the G10 space, up 0.40% since the open to 0.6225. Weaker domestic confidence figures didn't weigh on the Kiwi.
• The yen generally lagged the rest of the G10, in line with firmer risk appetite. USD/JPY is still slightly lower, last at 138.50. EUR and GBP are both around +0.30% firmer for the session.
• Coming up, we have Eurozone, French and Italian CPI as well as a slew of US data including ADP employment, MNI Chicago PMI and the release of the Fed’s Beige Book. Fedspeak from Bowman and Cook is also due, although Chair Powell also speaks on the economic outlook and the labour market, which will likely be the main focus.