The USD is strong leading into the NA open as other markets are relatively quiet. Yesterday’s data was encouraging and has supported some upward USD pressure; however it is noteworthy that the USD DXY index continues to trade just below its average oneyearlevel (see bottom chart). The IMF’s Lagarde highlighted the riskassociated with tapering and reiterated that there must be vigilance against deflation. AUD has dropped to a 3+ year low on the back of notablyweak employment; highlighting the importance of the domestic storiesin the current environment. Today’s focus will be US CPI (consensus:1.5%y/y on headline and 1.7%y/y on core) followed by Chair Bernanke(11am EST).
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