[MARKET ANALYSIS] DXY cautiously firms ahead of geopolitical updates, JPY pares verbal intervention strength while NZD underperforms

DXY edged higher throughout the entirety of the European session following punchy Iran rhetoric. The index marked a session high of 98.21, rising from its earlier trough of 97.83 made in Asia. (Full Middle East analysis on the headline feed) As it stands, both US and Iran continue communication, but there is no confirmation yet on second-round talks or a ceasefire extension - not to mention Lebanon, which remains a key point. Aside from geopolitics, POLITICO reported this morning, "a growing chorus of Republicans, eager to install Warsh, are joining the call for the administration to end the probe" into Fed Chair Powell. This comes ahead of Warsh's hearing next week. The session ahead sees remarks from Fed’s Williams (voter), who will speak at a Federal Home Loan Bank of New York event, while Miran (voter, dovish dissenter) will speak on the global outlook.
Antipodeans trade mixed. While Aussie is a touch firmer against a resilient USD following jobs data - Kiwi sits at the bottom of the pile as bets for RBNZ tightening pare a touch with markets implying 77bps of easing by year end (prev. c. 83bps). NZD/USD began falling in Asia, though losses extended throughout the European morning to trade at session lows of 0.5893, the move likely to face support @0.5892.
JPY had a choppy overnight session with USD/JPY marking a session low of 158.27 after successful jawboning from Finance Minister Katayama; she told G7 members that Japan was watching FX with a high sense of urgency. She also reiterated close communication with the US Treasury. This, as is typically the case with the Japanese Finance Ministry, indicates officials are uncomfortable with the extent of JPY weakness, with JPY nearing the key 160 mark. Since these comments, JPY pared the entirety of the strength Katayama gave to the haven, pressured by the gains in the USD.