The US dollar is trading softer though largely within yesterday's ranges against the major currencies. The rally in equities carried over into Asia but European markets are narrowly mixed, and US shares are trading lower.  Bond yields are mostly higher though US Treasury yields are paring yesterday's push higher.  

The dollar-bloc continues to firm.  Some attribute this to new carry plays in the wake of the Fed's decision to stand pat last month.  However, as the positioning the futures suggests, the gains are not simply participants going long these currencies, but shorts are being covered.  

The Reserve Bank of Australia kept rates on hold today, as widely expected.  The statement was not particularly dovish, suggesting the bar is high to a rate cut this year.  The RBA cited improvement in the labor market.  Separately, Australia reported a larger-than-expected trade deficit (exports flat, imports up 1%).  This shows Australia is still struggling with the terms of trade shock.  The $0.7150 area is the next major hurdle.  

The New Zealand dollar is slightly firmer as the market awaits the global dairy auctions amid expectations of higher prices.  The $0.6530-$0.6550 area caps the upside.   Sentiment toward the Canadian dollar was help by the recent economic data indicating the economy has returned to a growth track (June and July) after contracting for the first several months of the year.  Today's news may challenge its ability to recover much more.  The trade deficit is expected to widen sharply in August and the IVEY survey is expected to soften. Initial support for the US dollar is seen near CAD1.3050.  The nearby cap is seen in the CAD1.3100-CAD1.3120 region.  

German factory orders disappointed.  They fell 1.8% in August.  The market had expected a 0.5% increase.  Adding insult to injury, the July series was revised to a 2.2% decline rather than a 1.4% fall.  Domestic orders fell 2.6% in August.  Foreign orders fell 1.2%, but this was mitigated by a strong 2.5% increase in orders from the eurozone.  The euro eased less than a quarter of a cent on the news.