Headlines:

Markets:

  • JPY leads, USD lags on the day
  • European equities mixed; S&P 500 futures up 0.4%
  • Gold up 0.2% to $1,758.77
  • WTI crude up 3.2% to $89.24
  • Bitcoin down 3.2% to $17,230

The post-CPI dump in the dollar continues to play out, as we see technical extensions across the board with the greenback suffering further after the softer consumer inflation print yesterday. Another big drop so far today sees the dollar index looking poised for its biggest two-day decline (roughly 3%) since 2009.

The positive risk mood added to the weight on the greenback, with China officially taking steps in pivoting away from its zero-Covid policy as well. Equities got a boost from the headlines in the run up to European trading and the optimistic tone stayed throughout.

EUR/USD is making headway, up 0.9% to 1.0300, while GBP/USD is up 0.5% to 1.1775 - both trading at the highs for the day. I highlighted the technical considerations for both pairs earlier here.

Meanwhile, USD/JPY showed some stubbornness initially at its 100-day moving average overnight but that gave way during the session before a quick drop below 140.00 as stops were hit. The pair hit a low 138.75 before sticking around 139.50 at the moment, still down 1% on the day.

As risk trades keep with the optimistic tone, AUD/USD is seen up 0.6% to 0.6660 and working its way towards its own 100-day moving average with USD/CAD also looking buoyed from a technical perspective - trading closer to 1.3300 today.

With it being a US holiday (stock market is open though), there shouldn't be much to change up the post-CPI narrative ahead of the weekend. And at this point, it looks like only Fedspeak can be the thing to pour cold water on this relief rally.