FX Analysis – Yield spike on hot retail sales fails to lift USD, AUD outperforms, JPY , NZD.

USD traded in a tight range on Tuesday despite a big move higher in treasury yields after a beat in US retail sales figures, the headline rising 0.7% M/M vs 0.3% expected.  DXY whipsawing within a contained range, hitting a high of 106.52 on the initial reaction to the retail sales figure, but quickly paring gains to hit a low of 106.02. Fed member Barkin Fed’s also spoke noting that the FOMC will have a good debate when asked about the chance of a Fed hike at heir November meeting. Looking ahead, Fed speakers are set to continue, ahead of Chair Powell on Thursday, also any further geopolitical updates will be closely watched by USD traders.

AUD and NZD were divergent on Tuesday, with the Aussie the G10 outperformer and the Kiwi the laggard. AUDUSD continuing its bounce off the major support at 0.6286 to rally to a high of 0.6380, helped along by what was seen as hawkish RBA minutes released during the session. NZDUSD on the other hand struggled after a not as hot as expected NZ CPI, NZDUSD dipping to test the October lows at 0.5871 before finding some support..

AUDNZD surged higher, retaking the key 1.07 level and within a whisker of also breaching 1.08

JPY faltered against the USD despite seeing strength early in the session after a Bloomberg report that the BoJ was considering revising their inflation forecasts higher. The surge in the Yen swiftly faded with yield differentials pushing USDJPY higher, to hover just below the 150 “intervention zone”

Today’s calendar below: