[MARKET ANALYSIS] Quiet trade across G10 FX, with the Buck marking May highs and the Aussie continuing declines not seen in a decade

G10s are broadly lower against the Buck with the Dollar Index +0.1% as oil prices rebound on US and Iran exchanging fire. General sour sentiment across assets sees high-beta underperform despite central bank pricing moves re. Antipodeans on Wednesday, while cyclicals are also weaker.
The Buck marks its third consecutive session of gains and marked a fresh May high amid the US-Iran flare-up (See Iranian War Day 90 analysis on headline feed). The Dollar index has moved further away from significant DMAs, which are now well below and with no sign of an immediate resolution and repricing of G10 rates, with oil far from recent highs and Waller shifting hawkish, the recent drivers. Today’s driver will be the PCE and GDP reports, alongside Fed speak from Williams, Musalem and Barkin.
AUD is the weakest currency in the G10 space on the day amid the general geopolitical risk tone, lower-than-expected Aussie inflation data and the popular carry trade against NZD vulnerable to a Hawkish RBNZ this week. On Wednesday, headlines pointed out that the Antipodean cross marked the largest one-day decline since 2016. The cross found some buyers just above 1.2050, though not enough to halt its declines. AUD/NZD -0.1% on the day. MUFG writes “...with the pre-emptive nature of the RBA policy approach allowing a longer period of pause, a further extension lower in AUD/NZD seems likely.”
EUR is a touch lower against a stronger Buck with firmer energy benchmarks hurting the single currency. Remains a lack of EZ-specific newsflow as focus exclusively lies on geopolitics, which drives the Greenback. 1.16 remains supported for now, where it found buyers below overnight. ING highlights risks “in our view, should the US-Iran stalemate continue. We still see some risks of a 1.150 test before a rebound, but intraday trading remains highly headline-dependent.”