FX Daily Wrap: Usd back on the rack pre-month end, SOTU and FOMC

The broad Dollar is ending a topsy-turvy session under renewed pressure with at least 3 major banks calling for end of January rebalancing sales of the US unit. The DXY has reversed sharply from early 89.600+ peaks to sub-89.000 levels again, with individual G10 pairings eyeing key chart levels and/or recent highs/lows vs the Greenback. The Chf and Jpy extended safe-haven gains vs the Usd (having outperformed for the most part) to trade close to big figure support at 0.9300 (and the 0.9290 ytd base) and just below 108.50 vs 109.20 overnight (amidst some Japanese data misses) with the 108.25-30 lows of 2018 so far not far away. Eur/Usd and Cable both bounced 100+ pips from their worst levels to around 1.2450 and 1.4150 respectively at best, as the Eur/Gbp cross pivoted 0.8800 amidst more UK-EU Brexit verbal banter. Usd/Cad tested the water near 1.2300 despite mixed NAFTA messages (some progress, but still big divisions) and a further retreat in crude. Aud/Usd fell just shy of the 0.8100 handle amidst the Dollar’s ‘turnaround Tuesday’, but will draw independent impetus from Aussie inflation data alongside the US specific events ahead. However, the Kiwi continued to lag (Nzd/Usd below 0.7350) after only a fleeting lift from better than expected trade data and internal import/export tallies. Cross flows and IMM spec positioning said to be hampering the Nzd, but also last week’s below forecast Q$ CPI report. Trump up next, and volatility rising in the currency, stock and bond markets.

(RANsquawk)