[MARKET ANALYSIS] DXY remains lacklustre following recent disappointing ISM data

DXY: -0.1%

• Remains lacklustre after ultimately weakening yesterday due to the disappointing ISM Manufacturing PMI data, which clouded over the initial haven demand seen in response to the US strike on Venezuela and the capture of President Maduro, while there were also some recent comments from Fed's Kashkari, who said the job market is clearly cooling and inflation is still too high.

EUR/USD: +0.1%

• Ekes slight gains after the prior day's gradual intraday recovery as the dollar was weighed by the soft ISM data and with very little newsflow from the bloc, while participants await French and German consumer inflation figures.

GBP/USD: +0.1%

• Holds on to recent spoils after returning to above the 1.3500 level in tandem with the strength in cyclical peers, although further upside is capped by resistance around the 1.3550 level and with little reaction seen from the slight acceleration in UK BRC Shop Price Index to 0.7% (Prev. 0.6%).

USD/JPY: Flat

• Trades indecisively amid a lack of tier-1 data from Japan and after trickling lower in choppy fashion as US-Japan yield differentials narrowed post-ISM data.

Antipodeans: AUD/USD +0.1% / NZD/USD +0.2%

• Remained afloat after having benefitted from the positive risk environment and recent upside in the commodity prices.

The DXY's lackluster performance, notably down 0.1%, stems from disappointing ISM Manufacturing PMI data, which has weakened the dollar's initial haven appeal amidst geopolitical tensions. This data highlights the cooling job market and persistent inflation, indicating potential challenges for the Federal Reserve's policy stance going forward, making it critical for traders to assess further economic prints and central bank guidance.