USD Leads FX Majors As Yields Help Provide Some Reprieve

Heading into today’s European trading session, the risk tone is mixed. Asia-Pacific indices are mixed, measures of volatility are elevated and safe-havens mixed.

Leading Asia-Pacific indices to the downside is the ASX 200 at -1.03%, followed by the Topix at -0.51% and the Nikkei 225 at -0.33%. The Hang Seng and CSI 300 are both positive on the session at +1.05% and +1.39%, respectively.

In the FX complex, it’s USD leading to the upside, as yesterday’s hawkish comments from Fed’s Waller and jump in US yields provided some reprieve from its recent weakness. As such, GBPUSD is currently testing the 1.26 handle to the downside, while USDJPY initially reclaimed the 128.00 handle.

Elsewhere, price action has been rather uneventful, with GBP and EUR leading to the downside, although this is in part likely to be a result of the rebound in USD. Of course, at least for the former, risks remain firmly tilted to the downside, with economic and political risks on the rise.

Looking ahead, the main event in today’s European session will be the Eurozone’s latest inflation report, which will be followed by Canadian GDP in the following US trading session.