The dollar is showing a varied performance. Backed by a hawkish position from the Reserve Bank of New Zealand, the New Zealand dollar excels against the G10 currencies, recording an increase of almost 0.75%. Conversely, the subdued Australian CPI has elicited a dovish response in the interest rate market, leading to a decline of around 0.40% for the Australian dollar, positioning it as the weakest among the G10 currencies. The market observed a modest decrease in the yen, though there appears to be some reluctance as it nears JPY159.50, with a careful eye on the possibility of intervention. The euro experienced a slight decline yesterday, reaching a low of approximately $1.1615 after facing resistance near $1.1655 on Monday. It is presently trading in a muted fashion within the quarter-cent range just under $1.1650 today. A move above $1.1660 suggests a test of a key resistance level within the $1.1680-85 range.

Despite the softer US yields, the yen has declined to its lowest level since the reported intervention on April 30. The dollar approached JPY159.40 during the North American session yesterday and held a robust stance. It reached a modest new high today near JPY159.45. In the first 18 sessions of this month leading up to yesterday, the yen has shown depreciation in all but four instances, notably on May 6, when another intervention by the BOJ may have occurred. Today, one-month implied volatility has reached a four-year low, currently positioned just below 6.30%. Nonetheless, the market is drawing the attention of official intervention. Sterling completely reversed Monday’s gains yesterday, trading just below the low of that day to hit $1.3435 in North America. It remains near the low established yesterday. It has faced challenges in exceeding $1.3460. Nearby support is in the $1.3400-20 range. A break may lead to an initial move towards $1.3380 and potentially revisit last week’s low around $1.3300.

The Canadian dollar has been trading within a narrow range, remaining near one-month lows on Monday and Tuesday, and it has now touched a marginal new low today. The US dollar reached a value of CAD1.3825 before the previous weekend and has now increased to CAD1.3835 today, establishing a new high since April 13. The next technical target is the CAD1.3870-80.Meanwhile, the greenback has sustained a level above CAD1.3795 for the entire week. After reaching a five-session high on Monday, slightly above $0.7180, the Australian dollar underwent a period of consolidation yesterday, characterised by low trading volume. Light buying activity was noted near the $0.7155 level. Without the capacity to exceed the 20-day moving average (~$0.7185 today), it appears vulnerable to additional downturns.

Today’s CPI, which was softer than expected, acted as the catalyst. It was sold to nearly $0.7135, approaching support that may be around $0.7130. A break could lead to a retest of last week’s low around $0.7080. In New Zealand, the recent hawkish stance by the RBNZ has driven the New Zealand dollar from around $0.5830 to almost $0.5890. Near-term potential extends to $0.5900-25.