[MARKET ANALYSIS] DXY takes a breather after recent gains and with the FOMC on the horizon

DXY: -0.1%

• Takes a breather overnight after mildly gaining yesterday amid the mostly subdued risk appetite and data deluge, while there were slight headwinds seen after Fed Chair Warsh spoke at Sintra, as the overall tone failed to prove as hawkish as expected after his inaugural FOMC press conference. Furthermore, trade-related uncertainty lingers with the US not agreeing to renew the USMCA in its current form and would continue engaging with Canada and Mexico to address shortcomings, while the attention turns to the looming NFP report.

EUR/USD: +0.1%

• Nurses some of the prior day's losses after gradually softening in the aftermath of the EZ HICP report, which came in below expectations and cooled from the prior on all gauges, while there was a slew of ECB commentary in which Demarco and Stournaras seemed fine with where policy stands for the time being, while ECB's Wunsch argued they would need stronger second-round effects to justify further tightening and Lagarde stated that risks to the economy were more balanced than a few weeks earlier.

GBP/USD: +0.1%

• Ekes slight gains and looks to test the USD 1.3300 level, after gradually shrugging off comments from BoE Governor Bailey, who noted that the softening economy and labour market were the reasons not to raise rates.

USD/JPY: Flat

• Trades indecisively and is ultimately flat, with price action contained near the centre of the 162.00 handle.

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

• Eked mild gains but with the upside capped amid the mostly subdued risk sentiment and after weak Australian trade data, which showed a contraction in exports and a surprise trade deficit.