FX Update: The dollar posted a fresh highs
FX Update: The dollar posted a fresh highs against the euro, yen and pound, among other currencies, but lost ground to the Australian and New Zealand dollars, which would buoyed up by much less worse than feared trade data out of China and ongoing hopes for a compromise on the U.S.-China trade talk front. EUR-USD settled back in the upper 1.1200s after edging out a fresh three-month low at 1.1249. Analysts retain a bearish view of the pair given the evident slowing in the Eurozone economy. While the Fed recently made a hawkish-to-neutral policy shift in terms of forward guidance on Fed funds rates, tightening is stilling happening via the Fed's ongoing post-QE balance sheet shrinking. USD-JPY rallied for fourth consecutive day, printing a fresh seven-week high at 111.13. Yen underperformance, aided by solid AUD-JPY and NZD-JPY buying, drove the move. The AUD-JPY, which is seen as both a proxy for China risks and a general forex market barometer of global investor risk appetite, rallied over 0.6%, posting a nine-day high at 79.19. Bloomberg reported President Trump was considering pushing back the March-1 deadline by 60 days. Trump also seems set on acquiescing to the deal in Congress on border funding. Also in the mix was better than expected trade data out of China, where exports unexpectedly rose in January, by a solid 9.1% y/y (markets had been bracing for a decline), while imports contracted much less than had been expected, by 1.5% y/y. Cable posted a one-month low at 1.2813. BoE's Vlieghe said that he sees the tightening path as being softer than a year ago.