[MARKET ANALYSIS] USD pressured throughout the morning, benefitting G10s; CHF and Antipodeans outperform

Continued USD weakness throughout the morning saw DXY fall to a 99.30 trough, its lowest since 5th June, while EUR/USD eclipsed the 1.16 mark, not seen since 17th June. The move was gradual and over the course of roughly an hour, the initial downticks without a driver, but later weakness seen around remarks from the Iranian Foreign Ministry which signalled commitment to the diplomatic process; remarks which also modestly weighed on Brent at the time. Analysts expect the USD weakness to continue, ING suggesting the USD can “probably trade to the soft side all week”, while others highlight the soft July data series; for now, DXY -0.3%, the level to watch below is the 200 DMA just below 99.20. Action elsewhere is very quiet, G10s mostly move in tandem with USD weakness. GBP/USD +0.3%, off the back of the weaker USD with UK catalysts light, Cable trading just above 1.3560, above all significant DMAs. Over the weekend, FT reported that Jamie Dimon warned the Treasury against raising bank taxes, a report which highlights the proximity of the Autumn budget. GBP is primed for a busy week of data, Tuesday sees Jobs data, Wednesday is inflation, Friday is Retail Sales. Low yielders are among the best performers as some likely carry USD positions unwind. USD/CHF -0.6%, testing the 50 DMA, USD/SEK -0.4% ahead of the Riksbank this week. High-beta currencies are also doing well on the back of easing Fed expectations which has helped the risk environment; markets now assigning a 30% probability of tightening in September, last week was c. 50%.