[MARKET ANALYSIS] Dollar regains some poise after slumping yesterday on de-dollarisation theme and Trump's FX rhetoric

DXY: +0.3%

• Nurses some of the prior day's losses after suffering from the ongoing de-dollarisation theme, and with the greenback not helped by weak US Consumer Confidence, while selling pressure was exacerbated late on Tuesday after President Trump said he doesn't think the dollar declined too much and that he can have it up or down like a yo-yo. The attention now turns to the conclusion of the FOMC meeting later, where the Fed is expected to pause on rates.

EUR/USD: -0.4%

• Pared some of its gains after having benefitted yesterday from the dollar's demise, which saw the single currency briefly reclaim the 1.2000 status, while there were several recent ECB comments, but did little to shift the dial.

GBP/USD: -0.3%

• Pulled back after climbing its highest level in more than four years, with GBP/USD now struggling to sustain its return to the 1.3800 territory amid very light newsflow from the UK.

USD/JPY: +0.5%

• Rebounded from a 3-month low after slumping on intervention speculation and rhetoric from US President Trump, who doesn't think the dollar declined too much and said that China and Japan always wanted to devalue their currencies.

Antipodeans: AUD/USD -0.3% / NZD/USD -0.5%

• Mildly softened as the dollar regained poise and with only brief support seen in AUD/USD following Australian CPI data in which the monthly reading for December printed firmer-than-expected, while the headline quarterly figures matched estimates, although the quarterly RBA-preferred Trimmed Mean Inflation topped forecasts and remained above the RBA's 2%-3% inflation goal. This prompted ANZ to shift its RBA rate hike call, in which it now sees the RBA raising rates by 25bps at its meeting next week and views this as a single insurance tightening and not the start of a series of hikes.

The dollar is regaining strength after a period of weakness influenced by de-dollarisation concerns and rhetoric from former President Trump. The Fed's upcoming decision to pause on rates could solidify this trend, while the market's focus on currency movements across major pairs, especially against the backdrop of recent economic data and geopolitical sentiments, suggests a potentially volatile environment for USD traders.