[MARKET ANALYSIS] DXY is little changed amid a lack of FX-moving catalysts, but holds on to recent PPI-driven gains

DXY: Flat

• Trades flat overnight but holds on to the prior day's gains after strengthening on another hot inflation report in which PPI accelerated and spurred a hawkish reaction across markets, with the jump in prices driven by final demand for services, although the components that feed into PCE were more mixed. Nonetheless, price action in FX is muted with little reaction during the ceremony and opening remarks from the Trump-Xi summit, while the dollar was also unmoved by the US Senate confirmation of Warsh as Fed chair.

EUR/USD: Flat

• Pauses after returning from a brief dip to sub-1.1700 territory, and with little impact from a slew of recent ECB rhetoric, including from Lane, who stated that the global oil shock from the Iran war may require ECB hikes, and that an increase in selling price expectations suggests input cost pressures will map into higher output prices in the coming months.

GBP/USD: Flat

• Lacks direction after recent two-way price action, while participants await quarterly GDP data from the UK and whether Health Secretary Streeting triggers a Labour leadership contest against PM Starmer.

USD/JPY: +0.1%

• Approaches towards the 158.00 level with only marginal weakness seen in the Japanese currency amid a lack of tier-1 data releases and some speculation regarding a potential extra budget.

Antipodeans: AUD/USD -0.1% / NZD/USD Flat

• Conformed to the humdrum mood across currencies amid a light Asia-Pac calendar and in the absence of any major fresh FX-related catalysts.