Forex today: risk-off, risk-on, dollar better bid

In stronger data on Thursday, Forex today was seeing a stronger DXY back onto the 90 handle to a high fo 90.16 from 89.62 while US yields climbed from 2.80% to 2.83% in the 10yrs, while 2yr yields rose from 2.25% to 2.29%. The Fed fund futures continued to price three more hikes by end-2018 (with 21 March a 90% chance), and another hike in 2019.

 Both Import Prices and Jobless Claims were positive while the Empire Manufacturing data was also better than expected. Also, Kudlow's appointment as head of National Economic Council was seen as moderating influence on Trump's trade stance, although news that Mueller has subpoenaed the Trump Organization made for a bout of risk-off in NY.

As for other currencies, EUR/USD opened 0.18% lower in Asia at 1.2368 after a mixed US session on Wednesday and as evenly spread throughout the risk-off Asian session into European trade, although weighed by EUR/JPY to equate for a 1.2365/84 range until European pressure took the euro into NY at 1.2360 where bearish pressure intensified. With a widening of the DE-US spread and a firmer yen, the cross and rates weighed in the US session sending the euro down to 1.2310 for a close of 1.2325, supported in the cloud top on the daily sticks. 

GBP/USD was better bid in Asia with the greenback pressured in Wednesday's US session, ranging between 1.3962/83 before the Europeans pressured the pound down to 1.3925 on fix related selling and the Russian/UK risk. For the US session, there was a slight lift back to 1.3955 and then 1.3987. The next risks ahead will be Brexit related to secretary Davis meeting Barnier on Monday ahead of the EU summit and BoE meeting.

EUR/GBP drifted lower on diverging UK-EZ rate path, with the BoE more likely to act ahead of the ECB, with the euro slightly under pressure from now so hawkish rhetoric from Draghi highlighting that inflation is not as perky as markets had been pricing in. 

USD/JPY was capped on  Japanese exporter sales bringing into question as to whether the 105 handle will hold up ahead of the FOMC meeting next week. In NY, the yen was bid on safe-haven flows once again and USD/JPY skidded to a low of 105.93 before recovering back to 106.33 the close.  

As for the Aussie, the pair opened in the NA session at 0.7855 after a 20% incline in the price overnight where the Europeans were handed a better bid commodity sector on basis of dollar weakness from the US prior session on trade war angst. Risk went south again and the Aussie with it falling below the 10-D SMA (0.7804) to 0.7795 and cloud daily top. There was a late pick up to 0.7810 for the handover. 

Key notes form US sessison:

Risk-off is elevated: Mueller has subpoenaed the Trump Organization

Key events ahead:

Analysts at Westpac offered a their outlook for the next key events ahead as follows: 

"Euro Area: Feb CPI final follows a preliminary reading of 1.2%yr (core 1.0%yr).

US: Feb housing starts and building permits are anticipated to edge back from Jan’s spike. Feb industrial production is expected to rise 0.3%. Following a solid run-up, industrial production has been a bit slower in advanced economies in Jan, but yesterday’s Jan-Feb China data surprised to the upside. Mar Uni of Michigan consumer sentiment is expected to continue to show an upbeat consumer."