Courtesy of John Nyaradi
The US dollar is mostly lower as the market anticipates the data deluge from China this weekend (along with the preliminary 50bp hike in reserve requirement) and trading volumes narrow. The euro drifted moderately higher, as light sovereign demand has allowed the euro to test but not break the lower barrier of December’s $1.306 -1.3250 trading range. Meanwhile, cable is an outperformer in today’s session, marching to a 12-day high following producer price inflation measures that were in line with consensus. USD/JPY traded on an easier footing after exporter offers capped gains early on in the session yet head backed to the ¥83.50 range in tandem with the drop in US yields. Elsewhere, the Australian dollar recovered to a 3-day peak following the initial dip on the China reserve move and the USD/NOK was the largest mover on the day as Norwegian inflation numbers remained steady.
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