Cautious tones are still observed as we await US-China trade talks tomorrow
The yen is holding firm as Asian equities are slumping following a bad day for stocks as seen in Wall Street overnight. US equity futures and Treasury yields are calmer but USD/JPY has moved to test the 110.00 handle in trading now, so expect the figure level to be a key point of interest for traders today.
Meanwhile, the kiwi is the weakest performing major currency after the RBNZ moved to cut its OCR by 25 bps to 1.50%. The currency slumped heavily on the decision but pared some of its earlier losses on profit taking and a measured outlook, with further rate cuts not a given at this point in time. NZD/USD fell to a low of 0.6527 but has since recovered to 0.6590 now.
The dollar is a little weaker across the board as major currencies are holding steady, though there is little change across dollar pairs from the European session yesterday. The greenback did gain some ground in US trading overnight on the back of haven flows but is giving some of that back in early trades today.
EUR/USD continues to sit close to the 1.1200 handle while AUD/USD is still hovering around 0.7000-20 levels, proving to be little changed since the RBA decision yesterday.
Looking ahead, expect focus to remain on risk sentiment so use that as a guide for how to navigate through the European morning session ahead.
