There was a bit of a brief respite in markets from the headline earlier that China is considering to reduce its inbound quarantine period from 10 days to 7 days. The dollar shot lower but has regrouped itself for the most part as equities remain pinned to the downside while bond yields are holding higher after the advance yesterday.
USD/JPY remains a focus point and traders are on edge on any potential intervention plays, with the pair sitting at 149.90 at the moment.
As much as the change from China might be a signal for the beginning of the end of its zero-Covid policy, I would expect lawmakers to play out a long-drawn battle. After all, if it is the case, then it will mark a climb down from Xi after having been adamant that his stance was the right one in dealing with the pandemic.
The dollar is now mostly flat against major currencies, with the aussie and kiwi lagging amid more sluggish risk sentiment and after the poor Australian jobs report earlier. Looking ahead, there won’t be much to distract from proceedings so expect trading to stay focused on the risk mood and watch out for any yen intervention by the MOF.
0600 GMT – Germany September PPI figures
0600 GMT – Switzerland September trade balance data
0645 GMT – France October business confidence
0800 GMT – Eurozone August current account balance
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
