Yen Leads Gains As Risk Appetite Remains Subdued

Lingering concern about the spread of the Delta variant across Asia amplified existing risk-off sentiment, boosting demand for safe haven currencies. The yen garnered strength over the Tokyo fix and established itself atop the G10 pile, as defensive mood prevailed. In a Japan's panel of experts recommended a state of emergency for Tokyo, which would cover the entire duration of the Olympics. The decision came on the heels of a number of press reports suggesting as much.

• The weakness displayed by crude oil sapped some strength from commodity-tied FX space. The Antipodeans led high-betas lower, amid chatter that AUD was sold ahead of RBA Gov Lowe's speech. The Governor's comments did not provide much in the way of fresh insights.
• NZD/USD dipped through the $0.7000 mark and printed a new weekly low of $0.6981, while AUD/NZD moved away from a two-month low of NZ$1.0661, as the kiwi underperformed.
• The greenback remained solid in the wake of Wednesday's release of Fed minutes. The DXY edged higher, albeit yesterday's three-month high remained intact.
• The main data highlights today include U.S. weekly jobless claims and German trade balance. The ECB will release the minutes from their Jun MonPol meeting, while policymaker de Cos is set to speak.