FX Update: The Dollar is trading on a mostly weaker footing
FX Update: The Dollar is trading on a mostly weaker footing following yesterday's volley of dovish Fed speakers which, along with the FOMC minutes from the December FOMC meeting, affirmed that the "Powell Put" is resonating with others on the team. EUR-USD punched out a three-month high at 1.1570 ahead of the London interbank open, though has since corrected back under 1.1540. The Dollar has also weakened against Sterling, Yen and other currencies, though had held up better against the Dollar bloc and other currencies with higher beta performance characteristics as global stock markets come under pressure. USD-JPY has dropped to a one-week low at 107.77, partly driven lower by Yen outperformance as most stock markets in Asia and U.S. equity index futures came under pressure. The risk-off turn is stemming in part from a lack of communication from the U.S. and China following three days of trade talks, which weren't at a senior level, and which concluded yesterday, leaving markets with a sense of disappointment. Much weaker than expected inflation data out of China, with headline December CPI tumbling to just 0.9% y/y from 2.2% y/y in November, also fuelled narratives about slowing demand in the trade-war afflicted Chinese economy. Despite this, the Yuan lifted to a five-month high, reflecting a broadly weaker tone in the Dollar.