FX Update: The Dollar has been trading with a softer bias
FX Update: The Dollar has been trading with a softer bias after President Trump said yesterday that he was "not thrilled" with higher interest rates while venting at the weaker Yuan, even though the remarks that were subsequently walked back some by a White House official. Trump's remarks were from a preview of an interview with CNBC, which will be played in its entirety later today. EUR-USD posted a 1.1678 high in the wake of Trump's remarks and has subsequently met good demand on dips. USD-JPY has consolidated below 112.50, above the Trump-inspired low at 112.05. There has also been a rekindling in the Yen's safe haven premium, reflected by declines in EUR-JPY, AUD-JPY and other Yen crosses. AUD-JPY printed a nine-day low of 82.21, for instance. Stock markets have been mixed in Asia, and S&P 500 futures have modestly extended yesterday's regular-session decline. The PBoC devalued the Yuan by the most for a single day since June 2016, with USD-CNY's reference rate set at 6.7671, up from yesterday's 6.7066 and the highest in a year. This points to a deepening in the Sino-U.S. trade war. In data, Japan's June core CPI lifted to a rate of 0.8% y/y, up from 0.7% y/y in May, as expected and still far short of the central bank's 2% target. The data chimes with a recent report saying that the BoJ will likely cut its long-term inflation projections.