[MARKET ANALYSIS] USD marginally firmer; AUD outperforms; price action quiet elsewhere

DXY is marginally firmer, with the USD edging up against most peers after Tuesday's broad losses amid strong US equities, lower yields and constructive Middle East headlines that were later denied. Focus remains on Iran-US talks via Pakistan and Qatar, while envoy Witkoff meets Russian President Putin today with an updated Ukraine peace proposal.

EUR/USD is slightly softer in a tight range near the 1.12 handle, with French unrest and the wider OAT-Bund spread in focus ahead of Moody's review on Friday; ECB's Lane, Cipollone and Lagarde are due to speak later.

GBP/USD is flat around 1.3375 after Tuesday's outperformance on the surprise drop in UK unemployment to 4.7%, with UK CPI due later today. GBP/USD has dipped back under its 100 DMA (1.3366)

USD/JPY is marginally higher and holding above 158.00 after soft Japanese trade data, while Finance Minister Katayama said there is no major divergence with the BoJ on inflation or policy.

AUD/USD outperforms, back above 0.7000, while RBA's Hauser said overnight that the inflation outlook has deteriorated and the quarterly trimmed mean looks set to be higher than expected.

Sessions of this kind, where a broad dollar move retraces only partially and cross-asset signals are mixed, tend to resolve on the next scheduled catalyst rather than on positioning alone, and the calendar here supplies several: UK CPI, a Moody's sovereign review on France, and a heavy slate of ECB speakers. The euro's anchor is the OAT-Bund spread rather than rate differentials at this stage; episodes where French political risk drives the pair have historically been gap-prone around reviews and votes rather than trend-driven, and ratings outcomes in either direction have tended to produce outsized spread moves relative to the underlying fiscal arithmetic. The yen sitting above 158 with the finance minister publicly dismissing divergence with the BoJ fits the established verbal-intervention sequence: such comments typically slow rather than reverse yen weakness, and the tell for escalation has been a shift from finance-ministry remarks to actual rate checks. Sterling's loss of the 100-day moving average after an employment-driven rally is the classic pattern of a data surprise fading into the next print, with CPI the deciding input for whether the move extends. The outlier is the Aussie, where explicitly hawkish RBA commentary on trimmed mean inflation has, in past cycles, been a more durable driver than risk sentiment, and follow-through has tended to depend on whether other board members echo the message. WTI and gold remain hostage to headline-driven Middle East and Ukraine diplomacy, a flow that has repeatedly reversed on denials within the same session.