AUD and NZD have fallen out of bed overnight on renewed concerns over the potential for central bank selling interventions. Both central banks have complained about the high level of their currencies in recent months and the RBNZ intervened to try an knock NZD down earlier this year. Recent comments from Governor Stevens has raised concerns that the RBA may be about to step up from trying to talk AUD down to a more active approach. Governor Stevens he suggested he is open minded about intervening in FX markets but remains unconvinced as to whether it would actually be effective. Reports suggested the RBA may have been already quietly been selling AUD in recent months. AUD and NZD have already been selling off for the last month. The combined event of these statements and the negative impact of soft Chinese flash manufacturing PMI have dragged the dollars down and could potentially spark a deeper shakeout of weak hands. Heading into the weekend, news flow is relatively light but we could see more action in CAD over the next 24 hours with two of the bigger Canadian releases due. This time around, inflation may be more important than retail sales. Inflation is expected to drop again raising the risk of deflation that could increase pressure on the Bank of Canada to start cutting interest rates once again. CAD has been falling ahead of these releases with USDCAD breaking out over $1.0500. Another area that has been active today is energy commodities. The group has been falling for the last few months but has started to show signs of turning around. Better than expected natural gas storage combined with better than expected US crude oil inventories has renewed interest in the sector. What is particularly about this rebound is that it has been driven by improving economic data out of the US and expectations of higher demand. This has the potential to drive more sustainable interest than the easy come easy go politically driven rallies like last summer’s ailed Syria spike. Economic News Highlights of overnight announcements include: The US Senate Banking committee voted 14-8 to approve the nomination of Janet Yellen moving her Fed Chair confirmation process to the next stage. Meanwhile, the US Senate voted today to cut the threshold for acceptance of nominees except Supreme Court judges to 50 from 60 in order to expedite confirmations. US jobless claims 323K vs street 335K US producer prices 0.3% as expected Brazil unemployment rate 5.2% vs street 5.4% US flash manuf PMI 54.3 vs street 52.3 street 52.3 China flash PMI 50.4 vs street 50.8 France flash manufacturing PMI 47.8 vs street 49.5 France flash service PMI 48.8 vs street 51.0 Germany flash manuf PMI 52.5 vs street 52.0 Germany flash service PMI 54.5 vs street 53.0 Eurozone flash manuf PMI 51.5 as expected Eurozone flash service PMI 50.9 vs street 51.9 Upcoming significant announcements include: 7:00 am GMT Germany GDP street 1.1% 9:00 am GMT Germany IFO bus climate street 107.7 9:00 am GMT Germany IFO current street 111.5 9:00 am GMT Germany IFO expectations street 104.0 8:30 am EST Canada retail sales street 0.3% 8:30 am EST Canada consumer prices street 0.8% vs previous 1.1%

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