Equity markets around the globe dipped on Wednesday after tensions around North Korea's nuclear ambitions flared following commentary from US President Donald Trump. Both the Japanese Yen and Swiss Franc have outperformed on renewed safe haven demand.
Elsewhere the commodity currencies - hit by the risk-off nature of global markets - were hit again after a weaker than expected Chinese inflation report. The July CPI figures showed a slower pace of price gains, pressing pause on what's been a streak of improved Chinese data. Softer inflation could also mean weaker Chinese demand, and given Australia and New Zealand's trade relationship with China, the inflation report has filtered through into weaker Australian and New Zealand Dollars.
Later on in the day FX markets turn their attention to the Reserve Bank of New Zealand rate decision. While no change in rates is expected - and no moves are priced-in for this year whatsoever - recent softer Q2 inflation data and additional New Zealand Dollar strength since the June 22 meeting may give the RBNZ to tilt its commentary into a dovish direction.
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--- Written by Katie Pilbeam, DailyFX
