USD is consolidating around current levels as equities trade sideways. The USD is outperforming vs risk proxy CHF & JPY, light flows thou. There was standout flow in EUR and SEK Wednesday morning where the desk saw macro sellers of EUR and real money buying of SEK.
CHF has seen continued demand for topside structures as the spot selloff stalled and rallied off recent lows. There has been minimal follow through from NZD on the flow side, but spot is retesting overnight lows, the team had seen some macro profit taking into the dip in Asia.
In EM, macro buyers of USDTRY and USDZAR after South African CPI came in lower than expected, trading note the short term and systematic market feels like it is leaning long USD looking for a break of 15.00.
Overnight there was an outsized move lower in USDKRW after South Korea's finance ministry said authorities are closely monitoring FX moves, as they judge the recent KRW depreciation as an overshoot. The desk continues to see selling interest on Wednesday and in the option space market looks for more vol neutral/selling structures.
A mix of model and real money names are emerging as buyers in USDMXN and USDBRL. Both pairs are trading right against the respective topside resistances at 20.00 and 5.30 and there is still seeing plenty of offering interest above 5.30 despite the flows. USDMXN should continue to trade in a range over the near term and the desk would be partial to buying on dips ahead of 19.80.
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