It was a subdued day across major FX in the timezone here. The excuse du jour seems to be waiting on the US CPI data coming up on Wednesday US time. Its such a good excuse it’ll probably get trotted out again tomorrow here!

USD/JPY dropped back again from just over 135 to lows circa 134.70. So, not too much a range. And it was a similar small range story against the dollar for EUR, GBP, AUD, NZD, CAD and especially CHF.

The drift down for USD/JPY has mainly dragged yen crosses off a little on the session.

The data of focus was on Australian business confidence and conditions, both of which came in showing improvement for the month (data from the National Australia Bank monthly survey of business). Drilling down into the numbers showed intense inflationary pressure. Wages, input costs and retail prices all rose, as did capacity utilisation (see bullets above for more). The Reserve Bank of Australia next meet on September 6 and given this data a 50bp cash rate rise seems baked in already.

Political news was dominated by the FBI executing a search warrant at former US President Trump’s luxury Mar-A-Lago resort home. The warrant was approved by a US judge who found probable cause that crimes had been committed. The search related to 15 boxes of classified material Trump took from the White House on his departure. Although there could well be more to it than just this. With mid-term elections on November 8, the cauldron of hostile US politics is coming to the boil. It’ll get uglier in the weeks and months ahead. Stir in the Communist Party of China’s 20th National Congress in the same month. Geopolitics is not diminishing in intensity for some time to come.

usdyen chart wrap 09 August 2022