[MARKET ANALYSIS] DXY muted heading into FOMC, Aussie softer following cooler-than-expected CPI

DXY oscillates in a tight 98.57-98.68 range. Modest upticks were seen amid the WSJ report but the move was completely pared back in the hour following the headline. Coming up, the FOMC rate decision at 14:00EDT/19:00BST. With the rate widely expected to remain at 3.50-3.75%, focus will squarely be on Chair Powell’s guidance.
EUR/USD continues to hold above the 1.1710 handle, heading into a flurry of inflation metrics.
GBP/USD has found acceptance above the 1.35 handle, despite the political turmoil. PM Starmer can breathe a sigh of relief after UK lawmakers voted against holding an inquiry into whether the PM misled parliament over the Mandelson appointment. Politics will remain front and centre coming into the local elections on May 7th.
USD/JPY rotates in a tight 159.49-159.67 range, with Japan on holiday for Showa Day.
Antipodeans underperform, with the kiwi hit slightly harder. Australian inflation printed cooler-than-expected, which spurred AUD/USD to slip below 0.71700, but price action remains choppy. Commentary by Australia’s Treasurer Chalmers post-CPI stated that an inflation peak is expected at higher levels; however, this failed to cause any reaction.