• NZD/USD -0.7%
• AUD/USD -0.4%
• AUD/JPY -0.5%

NZD/USD

Kiwi Bears Push Lower: With no economic data to rescue the beleaguered kiwi currency, further downside pushed the underlying pair past the 0.6600 figure.  Comparatively, consumer price index figures bolstered dollar favoritism as inflationary pressures seem to be alive and well in the U.S. economy.  Rising in the month of January, overall headline inflation rose above to 4 percent on the year as higher energy prices contributed the bulk of the climb.  Traders more than confident in an increase in interest rates for the month of March bid the dollar higher on the session.  However, some reservations remain as core inflation, excluding the volatile component, rose to just above the target benchmark set by policy officials.  Rising by 2.1 percent, the core figure lends to some suggestions of an end to the current tightening bias in the longer term.  As for now, dollar bulls look to run the pair further lower as we head into the Asian session.

Rumorville: Further selling looks imminent as thin bid interest doesnââ,¬â"¢t peek until the 0.6500 figure.  Subsequently, additional offers look to appear on retracements at the 0.6628 daily high.

AUD/USD

Inflation Remains The Dayââ,¬â"¢s Theme: Compared to inflationary data in the worldââ,¬â"¢s largest economy, Australian bidding came to an end as slower wage price inflation led to notions of a consistent overnight cash rate.  Contrary to concerns expressed by Reserve Bank of Australia Governor Ian McFarlane, wage prices rose less than expected in the month.  According to the government report, employers paid wages that were 0.9 percent higher against consensus expectations of a 1.1 percent rise.  The lower figure may ultimately soften the previously hawkish view and leave the rate at the current 5.5 percent.  However, to that effect, the market will look to the upcoming weekly wages report in confirming this assessment.  Should the figure rise on the week, some doubt may be cast on the dayââ,¬â"¢s report, lending some temporary reprieve for the Aussie.

Rumorville: With earlier selling interest tipped at the 0.7400 figure, continued bidding looks to reside at the 0.7350 level, providing a temporary bottom heading into the session.  Stops remain slightly below at 0.7340.  Thin and premature selling interest hovers the 0.7425/30 region.

AUD/JPY

More Aussie Shorts Than Yen Bids: More Aussie selling than yen bidding led the cross lower as carry traders pared positions and short sellers entered.  With the inflationary data on the minds of investors throughout the day, itââ,¬â"¢s no wonder that the crosses faced the same fate as the major underlying.  Subsequently, Japanese yen bulls may also be anticipating a better than expected merchandise trade balance due out later in the session as the consensus sees a narrowing of the figure.  Although fears still loom of thin global demand and higher import valuations, the fact that the economy has turned the corner leaves many optimistic that global foreign demand remains buoyed.  Should the surplus rise rather than fall, the market may attract rising yen strength.

Rumorville: Bids in the major at 118.30 look to keep the USDJPY major afloat, leading to a retracement of todayââ,¬â"¢s action.  Comparatively, offers are ahead at 118.90 with stops just above 119.

Richard Lee is a Currency Strategist at FXCM.