Yen Takes Lead With U.S. Midterms In Spotlight, USD/JPY Shows Below 50-DMA

The greenback oscillated and the yen capitalised on its safe haven status as participants monitored incoming updates on the midterm elections in the U.S., where the Republicans moved closer to taking control of the House and the Senate race remained a toss-up. The prospect of a split Congress kept the BBDXY index in check.

• Spot USD/JPY probed the water below its 50-DMA for the first time since mid-August on two failed attempts to consolidate below that moving average. The rate fell to Y145.20 in early trade, but recovered over the Tokyo fix. Trader sources told Bloomberg that Tokyo-based leveraged accounts sold USD/JPY early on, which brought FX option strikes at Y145.00 into focus. The next round of sales sent the pair to Y145.18, but the bulk of those losses were quickly retraced. When this is being typed, USD/JPY trades ~15 pips shy of neutral levels.
• Spot USD/CNH turned bit on the back of China's inflation data. CPI printed at +2.1% Y/Y versus +2.4% expected, while PPI came in at -1.3% versus the median estimate of -1.5%. The impact of a miss in China's consumer inflation spilled over into the Antipodeans, applying some modest pressure to the space.
• Final U.S. wholesale inventories will take focus after hours. Today's central bank speaker slate features Fed's Williams & Barkin, BoE's Haskel & Cunliffe, ECB's Elderson & RBA's Bullock. The U.S. midterm elections remain under the microscope as the results keep coming in.